Running a crypto mining operation is a complicated and capital-heavy venture. Beyond securing a suitable location, founders also have to worry about things like electricity bills, cost of hardware and maintenance, and even employee payroll. As more and more cryptocurrency mines are opening shop, the demand for operating capital has increased. For many miners, using the crypto the earn from their operation to fund their business is a great way to establish and grow their companies.
Fund Mining Rigs with Crypto
Antminer, a popular miner hardware manufacturer, sells their S7 ASIC Bitcoin Miner for $199.99 each on Amazon. A crypto mining rig can have anywhere between four to tens of thousands of these devices. The upstart cost of this hard can be in the millions of dollars. Additionally, the upkeep and maintenance costs associated with running these machines make the operational costs of a mine increasingly costly.
The cost of hardware and associated upkeep can be a big drain on a crypto mining business’ resources. Using the crypto miners earn through mining is an easy way to get access to USD or stablecoin funding without having to sell their mining rewards. Learn more about how BlockFi’s crypto-backed loans work here.
Pay Mining Electricity Bills with Crypto
Bitmain’s SanShangLiang industrial mining complex in Mongolia has over 25,000 machines that process $250k of Bitcoin every day as of May 2018. That massive crypto mine has a daily electrical cost of over $39,000. This facility has a higher power consumption than a small town.
This incredible power bill puts a big strain on the business’ viability. While the price of cryptocurrency changes from day to day, the price of power at these facilities does not. Medium and large-scale mining operations typically negotiate and lock-in the price of power with a provider on multi-year or even multi-decade contracts. While that price security is valuable, the fluctuation in the crypto market leaves business owners open to risk.
By putting the crypto you earn from mining towards a crypto-backed loan, you get the advantage of being able to keep the ownership of your crypto without having to sell. This funding option is particularly useful if you think your cryptocurrency will go up in value in the future. Learn more about how collateralized loans work here.
Pay for Business Expenses with Crypto
With the growth of the cryptocurrency industry, more and more business owners are using cryptocurrency to fund their companies. At BlockFi, we have business clients who use us to help them with anything from funding employee payroll to paying for a business expansion.
For business owners of all sizes, the success of their business relies on its employees and their ability to be effective in their job. The core of that experience is receiving their compensation on-time and in-full. And once your business begins to see success, it may be time to expand the business. This may come in the form of a diversification of products or services, growing marketing and outreach strategies, or even opening a new location for you business. These activities are expensive but worthwhile for the long-term growth of a company.
By leveraging their BTC, ETH, or LTC, clients have the benefit of receiving funds directly into their bank account without having to sell their crypto. Applying for a BlockFi loan takes less than 2 minutes and does not involve pulling your credit score. If you have any questions about BlockFi or how our loans work, please contact us at firstname.lastname@example.org. We love hearing from you.