2024 is in the rearview, and it was the most explosive year (in a good way) for bitcoin mining since 2021.
The year witnessed public miners flourish and founder, AI insert itself into company strategies, new ASIC hardware manufacturers come to market, and of course, Bitcoin’s Fourth Halving. It was also Blockspace’s first full year in the media cycle, and we did our best to stay on top of the annum’s most notable stories. Here are our self-selected top five.
#5 A hashrate arms race is heating up between the U.S., Russia, and China
In 2024, a new month meant a new all-time high for Bitcoin’s hashrate – business as usual. Miners in the United States deployed most of this hash, but plenty of it still came from the star spangled banner’s chief geopolitical rivals: Russia and China.
Russia has become one of the hottest bitcoin mining markets on the globe, with some ASIC suppliers seeing “almost half” of their business flow from Russia, according to Cryptocurrency Mining Group partner, Denis Rusinovich. This corroborates word-of-mouth reports overheard at Bitmain’s 2023 Hong Kong World Digital Mining summit.
Despite the infamous 2021 ban, China is still a major player in the bitcoin mining industry. There’s no clear indication that the CCP will reverse its ban, but the major manufacturers reportedly still operate assembly sites in the region to service domestic miners, including significant mining activity in the region.
Luxor COO Ethan Vera estimates that three nations capture anywhere from 60-80% of Bitcoin’s hashrate. In the United States, public miners operate roughly a third of the nation’s hashrate.
#4 Rhodium files for bankruptcy, faces suit from investors for alleged fraud
It’s a bull market, but that doesn’t guarantee success.
Just look at Rhodium Enterprises, a Texas-based bitcoin miner that filed for Chapter 11 bankruptcy in August. Per court documents, Rhodium’s liabilities fall between $50 to $100 million, with the value of its assets estimated at $100 to $500 million. Rhodium had previously attempted an IPO in the fever of the 2021-2022 bull market.
Some months after the bankruptcy, a handful of Rhodium investors sued the mining company for alleged fraud related to Northern Data’s sale of Whinstone to Riot Platforms in 2021. The investors charge that Rhodium “misled and lied” to investors by not disclosing the sale of the facility and intentionally withholding information about the deal, which they allege was under contract at the time of investment. Rhodium hosts roughly 125 MW of its mining fleet at Whinstone.
In addition to this latest suit, Rhodium is embroiled in ongoing litigation with Riot regarding the Whinstone hosting agreement.
#3 Swan Bitcoin sues former employers over disputed ownership of mining assets
One of the bigger stories we broke this year involved Bitcoin financial service company Swan Bitcoin’s suit against former employees. The suit surfaced in September, with Swan alleging that former employees and contractors “hatched and executed a ‘rain and hellfire’ plan to steal Swan’s billion-dollar Bitcoin mining business,” according to court documents.
Swan established its bitcoin mining business line in 2023 in a joint-venture with Tether, and the operation had 11.5 EH/s online as of July 2024. Under the entity 2040 Energy, Tether fully capitalized the endeavor to the tune of $400 million, with the mining operation generating $84 million in the first half of 2024.
Only Swan could not realize any profit from the operation until it paid back Tether 100% of its invested capital, according to a Swan shareholder letter. This created issues for Swan’s series C raise and IPO-aspirations. The profit sharing structure of the JV, and the Defendants’ arguments in the case, call into question whether or not Swan has legal claim to the mining business to begin with.
Perhaps this is why Swan’s suit rests not on Tether “stealing” the mining operation, but alleged theft of “proprietary information” by former Swan employees. Be sure to stay subscribed to keep up to date with the latest drama.
#2 DCG splits Foundry’s self-mining into new entity Fortitude following mining pool’s 27% reduction in headcount
The largest bitcoin mining pool in the world, Foundry, had a number of shakeups in 2024.
Principally, Blockspace broke the news that the company laid off at least 27% of its workforce at the beginning of December. The layoffs were the preamble for a larger restructuring effort on behalf of DCG, Foundry’s parent company; as we reported a week following the layoffs, DCG is peeling off Foundry’s self-mining arm into a separate entity, Fortitude. According to a Q3 DCG shareholder letter, the parent company will seek to raise capital for the new entity.
The same letter reported that the self-mining business is projected to hit $80 million in revenue in 2024, while Foundry’s Q3 revenue clocked in at $35 million.
#1 Officials are halting Bitmain units at U.S. ports
If you come at the king, you best not miss – that is, unless you’re the emperor.
Uncle Sam is apparently eyeing Bitmain with some suspicion. Perhaps in our most consequential scoop this year, we reported that The Federal Communications Commission (FCC) had ordered the Customs and Border Protection Agency (CBP) to halt shipments of Antminer S21 and T21 ASIC imports at U.S. ports of entry.
Blockspace spoke with seven U.S.-based bitcoin miners affected by the blockade. At the time of reporting, some miners had had equipment held for months and were accruing holding fees with the CBP as a result.
There’s no clear indication why the CBP is holding these units, but sources surmised that it might be related to a Sophgo chip used in T21 control boards. Sophgo, which shares a CEO and co-founder with Bitmain in Micree Zhan, came under scrutiny after one of its chips was found on a Huawei device in defiance of U.S. sanctions, which prompted TSMC to sever ties with the company.
