MGT Capital, a tech company that engages in hydro-powered bitcoin mining has raised $2.4 million in a new round of financing.
In an announcement, the firm said the round of financing will help to “materially ramp up its bitcoin mining operations”. The financing comes following a 10% convertible note issued to UAHC Ventures, an investing firm. The note is self-amortizing with a ceiling repayment of $160,000 per month.
The new financing comes at a time when the company is constructing its third mining location in Washington state, with plans to deploy new mining rigs in the facility by early October 2017. A resource-hungry process reliant on large amounts of electric power, bitcoin mining results in new transactions added to the bitcoin blockchain. Currently, bitcoin miners are rewarded 12 bitcoins ($50,000) for creating the next transaction block in the chain.
As reported earlier, MGT capital secured a location in central Washington with low-cost hydro power resources in the vicinity to launch its mining operation in July 2016. Come September, the company announced it had completed its first phase of operations at a time when it was mining 90 bitcoins a month. With ‘phase two’ of its operation, the company ramped up its processing power from 2 PetaHash at launch to upwards of 5 PetaHash by the end of the year.
Last week, MGT announced the deployment of 650 new bitcoin mining rigs. The Bitmain 29 units will be installed at “a new multi MegaWatt facility” in central Washington, with production expected to reach maximum capacity by the end of the month.
“With the recent highs of $4,500 per bitcoin, the business of mining is as profitable as ever,” stated newly appointed president of MGT Crypto-Capital Stephen Schaeffer.
Earlier in June, John McAfee, CEO of MGT Capital, announced the company’s decision to mine Ethereum alongside bitcoin.
“We will definitely be profitable before the end of the year,” revealed McAfee in an interview to Bloomberg. “From bitcoin mining, we will get the experience and expertise to apply the blockchain to our security products.” One of those security products being developed includes a smartphone titled the ‘Privacy Phone’.
McAfee also dismissed recent chatter of bitcoin prices being in the midst of a bubble period, calling such talk ‘absurd’. In keeping with his bullish tone, McAfee sees bitcoin prices reaching $500,000 by 2020.
Featured image from Shutterstock.
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