HIVE Blockchain provides production update from July 2022
This press release constitutes a “designated news release” for the Company’s prospectus supplement dated February 2, 2021 to its amended and restated short form base shelf prospectus dated January 4, 2022.
VANCOUVER, British Columbia, Aug. 05, 2022 (GLOBE NEWSWIRE) — HIVE Blockchain Technologies Ltd. (TSX.V:HIVE) (Nasdaq:HIVE) (FSE:HBFA.F) (the “Company” or “HIVE”) is pleased to announce the production figures from the Company’s global Bitcoin and Ethereum mining operations for the month of July 2022, with a BTC HODL balance of 3,091 Bitcoin and 6,820 Ethereum as of August 4, 2022.
July 2022 Production figures
HIVE is pleased to announce the July 2022 production figures and mining capacity:
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279.9 BTC Produced
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2.2 Exahash of Bitcoin mining capacity in early July
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Increased to 2.26 Exahash of Bitcoin mining capacity during the month of July, with an average hash rate of 2.03 Exahash of Bitcoin mining capacity during the month of July
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2,957 ETH Produced*
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5.77 Terahash of Ethereum mining capacity in early July, some miners were taken offline temporarily for layout optimization due to higher summer temperatures
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6.49 Terahash of Ethereum mining capacity at the end of July, with an average hash rate of 6.19 Terahash of Ethereum mining capacity during the month of July
*The company’s production of ETH from GPU mining (including selective GPU hash rate optimizations) has yielded a total ETH production of 2,957 ETH.
Frank Holmes, Executive Chairman of HIVE stated: “In July we produced an average of 15.0 Bitcoin Equivalent per day, consisting of approximately 9.0 BTC per day and our Ethereum production of approximately 95 Ethereum per day. We are pleased noting that as of today we are producing approximately 10 BTC per day in addition to approximately 95 Ethereum per day.”
Aydin Kilic, President and COO of HIVE noted: “We continue to strive for operational excellence, ensuring that as we scale our hashrate, we also optimize our uptime, to ensure ideal Bitcoin and Ethereum output numbers.” Mr. Kilic continued, “We also want to provide an update on the BTC and ETH equivalency, equating the value of the coins produced daily. As such, the ETH that HIVE produced during the month of July is equated to daily basis, roughly equal to a monthly total of 185.2 BTC, which we refer to as Bitcoin Equivalent or BTC Equivalent.This is in addition to the 279.9 BTC produced from our Bitcoin mining during July, for a total of 465.1 Bitcoin -equivalents.
The company’s total Bitcoin Equivalent production in July 2022 was:
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465.1 BTC equivalent produced
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15.0 BTC equivalent produced per day on average
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3.77 Exahash of BTC equivalent hashrate (BTC hashrate plus equivalent ETH hashrate) as of July 31), with an average hashrate of 3.36 Exahash of BTC equivalent hashrate throughout July
Ethereum Outlook and Strategy
The Company acknowledges that there have recently been discussions surrounding the potential Ethereum “Merge” into Proof of Stake (“PoS”).
Regarding a PoS timeline, the company notes that a specific block for the Ethereum merger has not been specified. Until a specific block is identified and universally accepted by the Ethereum Foundation, the company believes it is undetermined if or when the merger will occur. In comparison, each Bitcoin halving event is at a specifically prescribed block height (specifically, every 210,000 blocks).
HIVE recognizes that there may be execution risk in implementing a business strategy if Ethereum goes PoS, and we believe there will be continued demand for GPU-based Proof of Work (“PoW”) mining. As such, the company has a strategy in case the merger occurs.
HIVE believes there is intrinsic value in a broadly decentralized PoW blockchain with Layer 2 smart contracts, as the majority of such projects exist on the Ethereum blockchain. If NFT and DeFi developers realize that a secure PoW Layer 1 blockchain is the best playing field for their code-based projects, there could be an increase in Layer 2 applications on the Ethereum Classic blockchain, post-merger.
The company has already started case studies, analyzing the hashrate economics of Ethereum Classic and other GPU-minable coins on an industrial scale. HIVE has also performed GPU optimizations throughout calendar 2022, which are proprietary and give the company a competitive edge.
If the merger happens, the company expects that there will be a competitive advantage required in technical expertise as GPU mining is more involved than ASIC mining. That’s why companies or hobby miners who are best at GPU optimizations will prosper. We expect that there will be more algorithmically driven application of GPU mining, where users can mine more coins. This will be in addition to the competitive advantage miners usually seek to have the best energy economy, so that they have the lowest operating cost per hash generated. GPU miners must have a low cost of hashing, while being innovative to achieve the highest return (revenue) per hash, through optimizations.
GPUs currently mining Ethereum are just one facet of HIVE’s operations that complement its fleet of Bitcoin mining ASICs. HIVE’s GPU fleet consists of two types of cards, our old fleet consists mainly of RX580s, and can be reused for other GPU mineable coins. The second type is our data center cards, namely our Nvidia fleet that we announced last year when we joined the Nvidia Partner Network; these cards have other applications in high-performance computing (HPC) applications. HIVE has developed a new platform for our data center scorecards to create new revenue streams. The company envisions the creation of new revenue streams from GPUs, such as providing HPC services for rendering, AI, ML, molecular modeling, etc.
Electricity costs in New Brunswick
HIVE has navigated several months of high energy prices in New Brunswick (“NB”) at its data center campus, which has affected all businesses that are customers with interruptible energy contracts. Mr. Kilic noted “Interruptible energy rates in New Brunswick have historically been between 3.5 to 4.5 cents USD per KWHR, based on annual averages over the last decade.” HIVE also has a part of the total electrical load in NB as a fixed effect of approx. 6 cents per KWHR USD. In the company’s fiscal Q4 2022 (January to March 2022), the power rates in NB based on the company’s use (mixed fixed and intermittent power) were approximately 12 cents per KWHR for 46MW capacity. Mr. Kilic continued “An advantage of being globally diversified, with 6 data centers in three countries, HIVE’s other facility had electricity costs of approximately 3.5 cents per KWHR for approximately 54MW of operating capacity.” Considering the average of HIVE’s global operating costs for electricity, data center staff and maintenance for all facilities in Q4 2022, the total cost was approx. 7.5 cents per KWHR USD, based on a global average operating footprint of 114MW, compared to revenues of USD 49.8 million (as stated in the company’s 2022 audited financial statements), which equates to approximately USD 0.20 per KWHR. The company notes that it was able to profitably mine cryptocurrencies during these periods, thereby maximizing coin production.
Since then, the Company’s average global operating costs for electricity, data center staff and maintenance in New Brunswick have improved significantly, as the Company has adopted strategies to avoid high interruptible power prices in NB, which may from time to time include reducing consumption. during periods of peak interruption power. In fiscal year 1Q 2023 (April to June 2022), the company’s average power costs in NB have been 7.4 cents per KWHR USD, using approximately 52 MW on average, and global operating costs for electricity, data center staff and maintenance for all facilities are approximately 5.5 cents per KWHR based on a global average operating footprint of approximately 126MW.
Difficulties in network mining
Bitcoin network difficulty dropped by 6.5% during the month of July. The Ethereum network had a sudden difficulty drop of almost 20% at the end of June, which was followed by a slight and gradual increase of 1.6% during the month of July. These factors affect our gross profit margins.
About HIVE Blockchain Technologies Ltd.
HIVE Blockchain Technologies Ltd. went public in 2017 as the first cryptocurrency mining company with a green energy and ESG strategy.
HIVE is a growth-oriented technology share in the emerging blockchain industry. As a company whose shares are traded on a major exchange, we are building a bridge between the digital currency and blockchain sector and traditional capital markets. HIVE owns state-of-the-art, green energy-powered data center facilities in Canada, Sweden and Iceland, where we only source green energy to mine both Ethereum and Bitcoin on the cloud. Since the beginning of 2021, HIVE has held in secure storage the majority of ETH and BTC coin mining rewards. Our shares give investors exposure to the operating margins of digital currency mining, as well as a portfolio of cryptocurrencies such as ETH and BTC. Because HIVE also owns hard assets such as data centers and advanced multipurpose servers, we believe our shares offer investors an attractive way to gain exposure to the cryptocurrency space.
We encourage you to visit HIVE’s YouTube channel here to learn more about HIVE.
For more information and to sign up to HIVE’s mailing list, please visit www.HIVEblockchain.com. follow @HIVEblockchain on Twitter and subscribe to HIVE’s YouTube channel.
On behalf of HIVE Blockchain Technologies Ltd.
“Frank Holmes”
Executive Chairman
For further information please contact:
Frank Holmes
Phone: (604) 664-1078
Neither the TSX Venture Exchange nor its regulatory services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release
Forward-looking information
Except for the statements of historical fact, this press release contains “forward-looking information” within the meaning of applicable Canadian securities laws that is based on expectations, estimates and projections as of the date of this press release. “Forward-looking information” in this press release includes, but is not limited to, business goals and objectives of the Company; and other forward-looking information about the intentions, plans and future actions of the parties to the transactions described herein and the terms thereof.
Factors that could cause actual results to differ materially from those described in such forward-looking information include, but are not limited to, the volatility of the digital currency market; the Company’s ability to mine digital currency; The Company may not be able to profitably liquidate its current digital currency holdings as needed, or at all; a material decline in digital currency prices could have a material adverse effect on the Company’s business; the volatility of digital currency prices; continued effects of the COVID-19 pandemic could have a material adverse effect on the Company’s performance as supply chains are disrupted and prevent the Company from executing its expansion plans or operating its assets; and other related risks as more fully described in the registration statement of the Company and other documents disclosed during the Company’s filings on www.sec.gov/EDGAR and www.sedar.com.
The forward-looking information in this press release reflects the company’s current expectations, assumptions and/or beliefs based on information available to the company. In connection with the forward-looking information in this press release, the company has made assumptions about the company’s goals, objectives or future plans, the timing of these and related matters. The company has also assumed that no significant events occur outside the company’s normal operations. Although the Company believes that the assumptions contained in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and, accordingly, such information should not be relied upon due to the inherent uncertainty therein.
