Nick Chong · 4 days ago · 2 min read
China › Mining
Chinese Investment Firm Buys US Department of Defense Office, Transforming Into Crypto Mining Farm
A U.S. Department of Defense data center will be transformed into a cryptocurrency mining farm later this by the Chinese investment firm Wuhan General Group, which recently purchased the facility.
Advancing the Mining Economy
Based on successive rounds of negotiation, the mining rigs will begin arriving in October. Wuhan voiced the usual narrative of choosing the U.S. facility–cheap electricity supply, cold climates and uninterrupted internet connections, all of which factor into forming a significant directive while setting up a mining farm
Apart from creating employment opportunities in the region, Wuhan aims to set a new mining center standards by scrutinization and to instill advanced security, safety and mining stability measures.
The 55,000-square-foot defense facility is equipped with 3MV of power and, based on these specifics, Wuhan estimates a total of 1,300 mining rigs can fill the facility. However, an additional 12,000 machines are expected after an upgrade to 30MV in 2019.
Based on financial projections, Wuhan the 1,300 machines will bring in $3.5 million per month. However, this number is poised to increase over time as rig capacity is added.
Ramy Kamaneh, the CEO of Wuhan General, notes:
“We had planned to build this operation three months ago, but with the bearish cryptocurrency market, we took a step back to reassess our strategy.”
Wuhan Remains Bullish
Kamaneh added the company’s decision “to wait for market stability” was a solid choice considering the falling profitability of mining rigs. However, Wuhan’s shareholders now believe the market has “bottomed,” and a bullish market is in the cards.
The development, however, comes after several U.S. districts introduced revised tariffs for potential crypto mining centers. In July, New York regulators passed an electricity rate scheme that allows mining businesses to negotiate contracts with utility providers in regard to usage and economic incentives.
Recently, the local government in Massena, N.Y., revealed its updated tariff conditions for mining businesses, which includes assessing firms on a case-by-case basis to provide electricity at variable rates. The move mitigates other customers from facing the brunt of higher tariffs.