MGT Capital Investments Inc. (OTCMKTS:MGTI) is now shifting its expansion plans to North America. It is different from the original plan of expansion in Sweden due to the availability of cheap power and cooling. The company canceled all of its contracts in Sweden. MGT Capital will now begin establishing a mining facility in North America. It is already shifting its mining rigs from Sweden.
Difficulty in Making Profits from Bitcoin Mining
The company has had some difficulty due to squeeze on profit margins in crypto mining. It is difficult to realize profits from Bitcoin (BTC) mining at this point. The network of Bitcoin has grown almost six times and that makes mining a bit difficult. The prices of hardware to mint Bitcoins have increased with the growing demand for ASIC miners.
The requirement of the Bitmain S9 mining rig has increased to 80 when compared to just 12 last year. The company holds just 6,800 mining rigs. So, the costs of Bitcoin mining together with other expenses have increased forcing the company to close its Sweden facility. The company also suffered from engineering errors and inexperienced hosts in making the Sweden facility a profitable one.’
MGT Capital Operates Washington Mining Facility
MGT Capital will continue to operate the Central Washington original mining facility. The company prefers this location due to cheaper power. The Washington mining facility dates back to September 2016 and is still functional.
The Canadian Firm is establishing an electrical substation mainly for the cryptomining. But, many Washington counties are opposed to new crypto mining. The company is therefore now searching for a location in the US or Canada where the material costs are stable.
MGT Capital Ropes in Bit5ive LLC To Manufacture Mining Pod for Hardware
MGT Capital has entered into a collaborative accord with Bit5ive LLC for the design and production of a crypto mining pod. The new system is capable of operating one Megawatt Mining Hardware.
Bit5ive will brand the pod as POD5. However, the naming rights of corporate owned Pods remain with MGT Capital. As per the terms of the accord, MGT Capital will provide the design and engineering expertise and funding for this venture. The company is expected to receive orders in September 2018.