Bitcoin mining firm, Riot Platforms, reported a decrease in Bitcoin mined in August compared to July. However, the company received over $31 million in power credits during the same month, equivalent to around 1,136 Bitcoin according to CEO Jason Les.
Out of the $31 million, Riot received an estimated $24.2 million in power curtailment credits under its contract with Texas grid operator, Electric Reliability Council of Texas (ERCOT). Additionally, the company received $7.4 million from ERCOT’s demand response program. Les highlighted that these monthly credits were greater than the credits the company received for the entirety of 2022.
Riot’s power strategy is based on three mechanisms, all of which rely on its long-term contract with ERCOT. The company receives power credits when it curtails operations and returns power to ERCOT if mining becomes unprofitable due to the price of electricity.
Les emphasized the significance of these credits in lowering Riot’s mining costs and making the company one of the lowest-cost producers of Bitcoin in the industry. He further stated that Riot’s power strategy serves as a competitive advantage for the company.
Texas faced harsh weather conditions in August, with temperatures reaching or exceeding record-high levels for several consecutive days. Riot’s presentation acknowledged that Bitcoin mining is one of the few industries capable of reducing energy consumption and supporting the grid during periods of high demand stress.
Despite Riot’s loss of $27.7 million in the second quarter of this year, the company displayed substantial improvement compared to the same period last year when it incurred a loss of $353.6 million during the crypto winter. Looking ahead, Riot plans to install thousands of new miners before the Bitcoin halving event in 2024.
The overall profitability of Bitcoin miners seems to be increasing, as demonstrated by Riot’s significant power credits and rising production. The company’s latest achievements reflect a positive trend in the industry, with mining costs falling below the current price of Bitcoin and revenues soaring.
In summary, Riot Platforms experienced a decrease in Bitcoin mining in August but received over $31 million in power credits. The company’s power strategy, based on its contract with ERCOT, played a crucial role in reducing mining costs. Despite earlier losses, Riot Platforms showed remarkable improvement and plans to expand its mining operations in preparation for future events in the Bitcoin market.
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