Blockchain Technology Solutions plans to fill an 83,000 square foot facility with mining equipment capable of processing 550 terahashes per second. The hardware comes from Spondoolies, a hardware manu
Blockchain Technology Solutions plans to fill an 83,000 square foot facility with mining equipment capable of processing 550 terahashes per second. The hardware comes from Spondoolies, a hardware manufacturer that invested in the deal to lower equipment costs. BTCS expects the machines online within two to four weeks, bringing its total hashing capacity to 891 terahashes per second, up from 550 terahashes, a 161 percent increase.
Spondoolies will receive 250,000 BTCS shares in exchange. Charles Kiser, the company's senior vice president, is transferring those shares from his personal holdings, leaving public shareholders unaffected.
BTCS projects mining 350 bitcoin in the first quarter of 2015. At current prices, that amounts to roughly $80,050. The company appears willing to bet on bitcoin rising later in the year.
Charles Allen, BTCS's chief executive, explained the approach: "We're seizing market opportunities created by the recent downturn in bitcoin price and expanding accordingly. At the current price of bitcoin, cost structure matters, and we believe we'll have one of the lowest cost mining operations in the industry."
BTCS is also deploying two of three multi-signature security layers developed with Gem.co, a firm where BTCS has invested. The company made Gem.co its security provider, and the multi-signature system is in beta testing, available to selected customers. BTCS has not announced a public release date.
The mining expansion fits into a broader strategy. BTCS management argues that a single service cannot sustain a cryptocurrency business for long. Instead, they are assembling an ecosystem. Their main product is a shopping service that lets customers buy from retailers through BTCS using bitcoin, even if those retailers do not accept digital currency. The service also compares prices across merchants. (The company has likened it to Kayak for bitcoin transactions.)
Beyond the shopping tool, BTCS operates a wallet and is investing in a growing list of firms. These include payment processor GoCoin, digital currency exchange Expresscoin, bitcoin ATM maker Coin Outlet, and the aforementioned Gem.co. Mining is another piece of that puzzle.
