Bitcoin mining operation raises $25 million for facility, rigs | Local News

Looking to seize on the moment, Blockware Mining — the cryptocurrency mining company that recently revealed its plans to build their flagship facility in Paducah — announced it had raised $25 million in capital during an oversubscribed second funding round.

Blockware founder and CEO Michael Stoltzner said he feels his company is poised for success now with these funds set to go toward the acquisition of 14,000 mining rigs and the completion of a new facility on its five-acre lot in Paducah’s Industrial Park West.

“We’ve had a very successful time as a company. We were incorporated in 2019 and did our first round of funding in the late fourth quarter of that year,” Stoltzner said. “We’ve had a strong two years of growth and I think we’ve been very well managed and strategic about our purchase and deployment of equipment to different facilities around North America.”

The development brings together the collaboration between various community partners, including the Greater Paducah Economic Development, Big Rivers Electric, Jackson Purchase Energy, Paducah Power, the Paducah McCracken County Industrial Development Authority, the city of Paducah, McCracken County and the Kentucky Cabinet for Economic Development.

The mining rigs are going to come to Blockware through a set of purchase programs that will bring regular amounts of new units to the west Kentucky facility each month between this August and July 2022. Getting this deal, Stoltzner told The Sun, was huge for the company.

“Probably the most difficult part of participating in bitcoin mining is the acquisition of equipment because there are only a few manufacturers in the world and they are all based out of China currently,” he said. “So we were able to accomplish through our capital raise getting on what’s called an annual purchase program where starting in August 2021 through July 2022 we will acquire 1,000 rigs per month for 12 consecutive months from Bitmain and on top of that we get an additional 500 rigs per month on a purchase program that runs from January 2022 through March 2022.”

Of these total 14,000 rigs, around 8,000 will be installed in the Paducah facility with the remainder to be sold to other entities.

Once installed, the rigs will start earning money by processing data, which Stoltzner is hopeful will be happening by the fourth quarter of this year.

The process consists of an incentivized network of miners competing for monetary rewards based on the “hash rate,” or the measuring unit of power needed to solve complex mathematical puzzles and earn newly-minted bitcoin.

Two sources of income come from mining the bitcoin that is earned each day — transaction fees and rewards.

Stoltzner is feeling good about the future of Bitcoin and Blockware, despite the decline in the cryptocurrency’s value since mid-April and — with the Chinese government’s recent crackdown on mining facilities — he is confident the door is opening for facilities statewide to get a bigger piece of the daily bitcoin pie.

“We are very bullish on Bitcoin. We’re long-term focused on it and we hold a fair amount of the Bitcoin that we buy in treasury,” the CEO said. “We don’t convert to U.S. dollars on a daily or regular basis.”

Overall, Stoltzner was riding high Wednesday and in his view the future is bright.

“It’s a major accomplishment for us to be able to get on that purchase program and be able to build out the facility in Paducah,” he added. “We’re very proud of those accomplishments.

“We’ve been able to put the pieces in place and now it’s just a matter of us executing and getting the facility built out and starting to take delivery of equipment.”