Riot Platforms Acquires Block Mining Worth IDR 1.48 Trillion

Riot Platforms, a leading Bitcoin mining company in the US. (Photo; Doc. Watcher Guru)

JAKARTA, KOMPAS.com - Bitcoin mining company giant Riot Platforms, recently announced that it has acquired a Kentucky-based Bitcoin mining company, Block Mining, with a value of 92.5 million US dollars (Rp1.48 trillion). This acquisition comes amid the difficulties facing small-scale Bitcoin miners.

In the agreement, Riot will pay 18.5 million US dollars (Rp296 billion) in cash and 74 million US dollars (Rp1.18 trillion) in the form of Riot's common shares. There is also a possible additional payment based on performance achievements, according to the company's statement.

This acquisition increases Riot's operational capacity by 60 megawatts (MW), with plans to reach 110 MW by the end of the year and more than 300 MW in the future.

This capacity increase allows Riot to increase its total hash rate, which is a computational power measure dedicated to mining Bitcoin. The higher Hash rate enhances Riot's ability to solve complex mathematical problems more quickly, thus getting more Bitcoin prizes.

The move comes after Bitcoin cuts in April, which reduced block prizes from 6.25 BTC to 3.125 BTC, effectively doubling the cost of one coin mining.

This increase in costs forced less efficient miners to operate with operating losses this year, as rising energy costs and reduced profit margins have burdened them.

Small miners with higher operational costs are very vulnerable, while large companies with cheaper access to electricity and more efficient equipment manage to survive this uncertainty.

Despite the challenges, Riot's acquisition aims to leverage existing Block Mining infrastructure and management teams to drive expansion and increase efficiency.

This acquisition directly increases Riot's hash rate by 1 exahash per second (EH/s), with a growth potential of up to 16 EH/s by the end of 2025.

In addition to increasing operational capacity, this acquisition also diversifies Riot's geographic footprint, providing benefits from different energy costs in various regions. Riot has Bitcoin mining operations in central Texas and Kentucky.