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Blockstream To Expand Bitcoin Mining Capabilities with $125 Million Funding

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Blockstream, a leading Bitcoin infrastructure provider, has announced a significant funding round, raising $125 million in a convertible note and secured loan financing to expand its institutional Bitcoin mining colocation services. 

The round was led by Kingsway Capital, with participation from Fulgur Ventures and other investors. The funding will be used to expand mining facilities and meet the high demand for Blockstream’s institutional hosting services. 

Sustainable Bitcoin Mining In 2023

The company boasts a solid reputation and a significant presence in the industry, cementing its spot as one of the world’s premier Bitcoin mining operators. With a strong trajectory of revenue growth projected for 2023, the company plans to not only expand its renewable energy mining offerings but also continue to innovate and develop its own Bitcoin miner.

Additionally, Blockstream remains a market leader in fast-growing BTC “layer-2” technologies such as Core Lightning and the Liquid Network. These technologies are focused on BTC micropayments, non-custodial trading, secure smart contracts, and the issuance of digital securities, stablecoins, and other financial products.

Blockstream President & CFO, Erik Svenson, said:
This fundraise allows us to accelerate the YoY revenue growth we created with our 2021 Series B and continue to build infrastructure for the future Bitcoin economy.

Svenson highlighted in the statement that their focus is on diminishing the risk for institutional bitcoin miners while empowering enterprise users to create valuable use cases on the most secure, sturdy, and scalable blockchain in the world, Bitcoin.

According to the press release, the recent happenings in the cryptocurrency sector highlight the significance of Blockstream’s contributions in the field of blockchain technology and Bitcoin mining.

Blockstream CEO Dr. Adam Back also said:

With 2022 being punctuated by multiple large-scale centralized party and protocol failures, we believe this has been a learning experience for the market: that the fundamental value of blockchains is in reducing the need to trust third parties.

Adam Back added that the recent emphasis on security and decentralization in the crypto industry presents an opportunity for market participants to transition to BTC-based non-custodial architectures such as the Liquid ecosystem of startups with decentralized market technology.

The Liquid platform, he noted, offers simple contracts that allow active traders to achieve self-custody through offline limit orders, non-custodial options, and collateralized loans, all while utilizing the security of their own hardware wallets and private keys. Mr. Back highlighted that this technology is compatible with both decentralized and centralized order-book exchanges.

Related Reading | Bitcoin Poised For Bullish Resurgence Amidst Reduced Miner Sales

Blockstream Eyes Another Funding Round – This Time At A Lower Valuation “Below $1B”

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Blockstream, a crypto infrastructure company, has set up an investment round that will raise “fresh funds at a lower valuation” than its previous one, which is about below $1 billion, as reported by Bloomberg.

A source with knowledge of the situation who wanted to remain anonymous because they were talking about private information revealed the valuation amount. “One of the people said the figure may change.”

In terms of blockchain infrastructure, Blockstream is at the top of the world rankings. Liquid Network, a sidechain developed by it, allows financial institutions to tokenize assets while facilitating quicker Bitcoin payments. Additionally, the colocation of Bitcoin mining operations is made possible by Blockstream Mining’s enterprise-class mining facilities.

The 2014-founded business with headquarters in Montreal is engaged in a collaborative initiative with Jack Dorsey’s Block Inc. Reid Hoffman, a co-founder of LinkedIn has also backed Blockstreamm according to Bloomberg’s report.

However, the lower valuation funding move was prompted by the closure of the FTX Exchange, which made it difficult for digital asset firms to find investors willing to support them financially. However, when the company obtained $210 million from investors, including Baillie Gifford and iFinex, in August 2021, its worth was $3.2 billion; today, it is nearly 70% lower.

The investment was received at the same time that Blockstream hired the core team to develop its ASIC division and purchased Spondoolies’ intellectual property(a producer of Bitcoin mining equipment).

Blockstream CEO Says, The Fund Is For Hosting Crypto Miners

Adam Back, the CEO of Blockstream, declined to respond to Blomberg about the amount of the investment round or value but stated that it would be used to increase the capacity to host cryptocurrency miners.

As miners sought large-scale hosting, he noted that they quickly sold out of all of their capacity and had a massive backlog of both current and potential clients. 

The report asserts that many cryptocurrency miners have been hard hit by the drop in the value of Bitcoin and other tokens, as well as the rise in electricity prices, which has resulted in loan defaults and the confiscation of computing equipment.

The CEO of Blockstream said:

While Bitcoin price and mining profitability are down, hosting rates have risen over the last quarters, and our mining services are a rapidly expanding, high-margin enterprise business for us.

The crypto industry is struggling to recover from this year’s downturn and is beset by worries about future contagion following FTX’s collapse, making venture finance more difficult to come by.

Not just Blockstream was thinking about flat or lower fundraising rounds, but so were companies like Amber Group and Blockchain.com.The previous record-breaking rate of investment into blockchain firms has been replaced by far colder circumstances during the crypto winter.

Related Reading | Bitcoin And Ethereum ETFs Filed By Hong Kong’s Three AUMs

Tesla, Block and Blockstream to build a 100% solar-powered Bitcoin Mining Rig

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Jack Dorsey’s Block, Digital asset infrastructure provider Blockstream, and Tesla unite together on a new venture to construct a solar- and battery-powered bitcoin mine in U.S’s second-largest state Texas. Speaking on the ambitious project, Adam Back, Blockstream co-founder, and CEO told that the mining facility is designed to be a 100% renewable energy bitcoin mining at scale.

“People like to debate about the different factors to do with bitcoin mining. We figured, let’s just prove it. Have an open dashboard so people can play along, maybe it can inform other players to participate,” Back said.

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Tesla, Block and Blockstream to build a 100% solar-powered Bitcoin Mining Rig 2

The mining facility will be powered by Tesla’s 3.8 megawatts solar PV array and 12 megawatt-hours Megapack. In addition to that, Blockstream would release a publicly accessible dashboard that will show real-time metrics of the project’s performance, including power output and total bitcoin mined.

The blockchain tech firm said the future version of the dashboard will include solar and storage performance data points. “This is a step to proving our thesis that bitcoin mining can fund zero-emission power infrastructure and build economic growth for the future,” Back said.

Blockstream aims to diversify crypto energy sources

The western part of Texas has abundant sources of renewable energy in the United States when combined with energy buyers like Bitcoin miners, can create financial opportunities. “Miners provide demand to these semi-stranded assets and make renewables in Texas economically viable,” according to Castle Island Venture’s Nick Carter.

Besides, Back said the off-grid mine is expected to be completed by the end of the year. If the project turns profitable in its pilot stage, the exec said, the firms would also bring wind power to the mix and scale the entire project.

“You’re making a sort of calculation of the optimal economic mix between solar and battery,” Back said. “There are 3.8 megawatts of solar and one megawatt of mining, so you can see you have to overprovision, because the peak solar input varies during the day and, of course, it’s not there at night.”

Blockstream said its ultimate goal is to strengthen the bitcoin network by diversifying the cryptocurrency’s energy sources.

Solar-powered Bitcoin Mining by Blockstream to see investment from Square of $5M

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Bitcoin mining might be facing severe cases of crackdowns in some parts of the world, the innovation to make the process have a less adverse effect on the environment continues.

In pursuit of bringing in sustainable methods for the same, the Jack Dorsey-led financial services company Square is all set to team up with blockchain technology provider Blockstream Mining to build an open-source, solar-powered bitcoin mining facility.

This facility will be situated at an existing Blockstream location. in the United States.

According to the official press release, Square plans to inject $5 million in the facility, with Blockstream that is focused on providing infrastructure and expertise to develop and manage the project for Bitcoin mining. This facility in question will be a “proof-of-concept for a 100% renewable energy Bitcoin mine at scale.”

Blockstream stated,

“We hope to show that a renewable mining facility in the real world is not only possible but also prove empirically that Bitcoin accelerates the world toward a sustainable future.”

The partnership, as confirmed by Square, is essentially a part of its Bitcoin Clean Energy Investment Initiative that was launched in December 2021 to promote companies engaged in reducing carbon footprint by the cryptocurrency ecosystem. Through this initiative, the two platforms will also roll out a “public-facing dashboard” which will act as a transparent case study for renewable energy as well as mining of the crypto.

Can Bitcoin really go green?

The debate surrounding the cryptocurrency’s reliance on non-renewable energy isn’t new. However, of late the discussions related to the environmental impact of mining for the world’s largest cryptocurrency have come under immense scrutiny, thanks to Elon Musk.

There’s no denying that it does consume a lot of energy. This is a common concern among the BTC institutions and retail traders alike.

Several developers and academicians have given their fresh dose of perspective on the controversial subject as the Bitcoin mining debate has gained traction once again. Some are of the opinion that looking for other ways and putting a stop to the increasing use of real physical resources for mining is going on a wild goose chase. However, there are those, who are trying to make Bitcoin green.

Recently, Norway’s second-richest person, and oilfield services billionaire Kjell Inge Røk­ke, had launched a new venture called Seetee. The maon objective of the company’s goal is to set up BTC min­ing op­er­a­tions that “trans­fer strand­ed or in­ter­mit­tent elec­tric­i­ty with­out sta­ble de­mand lo­cal­ly—wind, so­lar, hy­dro pow­er— to eco­nom­ic as­sets that can be used any­where.”

In short, it intends to locate Bitcoin mining centers in those places where renewable energy farms essentially produce electricity in surplus especially when there is low demand.

Blockstream Exec Identifies Bitcoin SV Multisig Bug

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Bitcoin SV has been one of the most controversial crypto-asset to ever exist. In the latest news, a BSV user reportedly lost nearly $100,000 due to a multisig script bug. The hackers purportedly exploited the network vulnerability in a bid to steal the assets of a user.

Adam Back, the CEO and Co-founder of Blockstream said,

“Wow, that’s a nasty BSV-only bug. Less than or equal instead of greater than or equal (number of signatures in a multisig). Presume they removed the standard p2sh multisig and replaced with this bugged home-brew multisig due to BSV anti-soft fork posturing, to undo soft-forks.”

The exploit was noted by another Blockstream Co-founder, Gregory Maxwell. Following which well-known Podcaster, Ruben Somsen tweeted,

So what happened with Bitcoin SV?

According to Maxwell, BSV ripped out P2SH from their consensus rules which left the Bitcoin SV ecosystem in a situation where they had to “home brew their own multisig crypto”. The solution to this was “electrumsv” which apparently is just a script that looks like a P2PKH [pay to pubkey-hash]. However, it adds up the number of passes and compares them to a threshold.

The exec went on to explain that the consequence was that these scripts had no security at all and furthermore could be spent by a script that sets is to zero valid signatures. While no real funds were lost and that the flaw was likely accidental, Maxwell added,

“Assuming the flaw was accidental, the error could have been avoided with even the most basic testing or review.  This situation would have been avoided entirely had BSV not ripped out the competent, time tested, and highly peer-reviewed mechanisms for multisig by Bitcoin in favor of far less efficient homebrew crypto. Yet again, we see that bamboozlement and competence are not good bedfellows. Leave it to BSV to make the YOLO incompetence of ETH land look comparatively reasonable.”

This is not the first time that Maxwell identified a potential bug in BSV. Even in December 2019, that could be executed to steal unsplit funds of BTC users on the Bitcoin SV chain.

Despite the recent turn of events,  BSV’s price action has not shown even a little reaction as it continued to move inside the range. At the time of writing, it was being traded at $165.12 after a minor surge of 1.68% over the past 24-hours.

Venezuela Citizens To Have 24/7 Access To Bitcoin With Blockstream’s Satellite Node

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Developed countries steering towards the adoption of technological developments, developing countries, and underdeveloped countries aren’t lagging behind. Particularly in the adoption of cryptocurrencies, the latter has been keener on the topic. Venezuela stands as substantial proof of the same. The latest news from the country further emphasizes its interest in cryptocurrencies.

Satellites To Address Internet Issues

The economic instability in Venezuela has left its citizens as well as the government veering towards cryptocurrencies for relief. While attaining proper internet connectivity could be a task in certain regions of the world, satellite nodes have come as a ray of hope. Utilizing Blockstream’s technology, Anibal Garrido and AnibalCripto set up the space node in Venezuela. The prominent crypto startup, Cryptobuyer reportedly spearheaded the entire event, as it provides services related to Bitcoin across Central and South America.

In its blog post, Cryptobuyer pointed out that the latest infrastructure eliminates the necessity for a local internet connection to access Bitcoin. Employing Blockstream’s EUTELSAT-113, the startup carried out its first transaction through the satellite and emerger successful.

Stressing the importance of addressing real-world problems, the CEO of CryptoBuyer, Jorge Farias said,

“For example, we already deployed Bitcoin ATMs and Bitcoin point-of-sale terminals across the region, and also launched a fiat-crypto exchange platform. Now with the Bitcoin satellite node, we address the local issues of internet connectivity in Venezuela. Users can’t afford to be cut off from the Bitcoin network!”

Adam Back’s Blockstream made an entry to Central America with this latest partnership and would reportedly prolong it. The capital of Venezuela, Caracas, and Boliver State are yet to have nodes installed.  At present, this Bitcoin satellite is limited to the residents of Valencia. Furthermore, Cryptobuyer intends to cover the entire county allowing users within the proximity of the satellite nodes to connect via local mesh networks.

Anibal Garrido, the CEO at AnibalCripto also commented on the latest innovation. Garrido stated,

“Having a 24/7 always-available digital money system independent of local internet infrastructure is now a reality.”

While the electricity, as well as internet services in Venezuela, are considered to be below average, the latest innovation could aid the adoption of crypto in the country.

DeFi Mania Eclipses Bitcoin’s Sidechain Liquid as Latter’s Figure Stagnates

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Despite being the undisputed leader of the cryptocurrency realm, Bitcoin blockchain has been riddled with scalability issues. Due to this, many implementations have been tried and tested to make the network more efficient.

One such is Blockstream’s sidechain-based settlement network, Liquid’ which is essentially a second layer solution for traders and exchanges, that enables faster, more confidential Bitcoin transactions and the issuance of digital assets.

L BTC in circulation

Despite being heralded as a promising solution to the network’s scalability problems, Liquid network figures appear to have stagnated. The circulation of L-BTC was on an uptrend since the beginning of the year. Rising from 600 L-BTC to 2,054 L-BTC, recording a growth of more than 242% in a period of just four months. However, post-April, the momentum appeared to have weakened. At the time of writing, there were 2,593 L-BTC in circulation, a rise of just 26% since April.

Ethereum- the unofficial sidechain for Bitcoin?

skew bitcoin defi lightning wbtc value 1

Interestingly, this stagnation in Bitcoins locked on the popular sidechain coincided with the explosion of DeFi. The Ethereum network is becoming Bitcoin’s largest second layer network. This was evident from the fact that the number of Bitcoins “wrapped” and flowing on the Ethereum blockchain has been increasing at an incredible rate.

TWJ had earlier reported that Wrapped Bitcoins’s market capitalization hovering a little below $500 million.

Second-layer solutions struggle as Bitcoin continues to be channeled onto the Ethereum blockchain

Additionally, the total value locked [TVL] for BTC-pegged ETH tokens has surpassed both Liquid as well as the Lightning Network platform combined. At the time of writing, BTC locked in LN was just 1,068. While this does not give the full picture as Bitcoins held on LN is much higher than what is available with public data and not the ones from the private channels, this, however, tells us that the second layer solution is struggling to add more liquidity.

Full Fledged Cryptocurrency Bank in Works as Caitlyn Long Emphasizes Digital Asset Importance

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As time progressed, more and more people entered the cryptocurrency industry, with institutions becoming the main target for digital asset companies. The influence of mainstream players has also brought the industry to the fore.

According to new reports, Caitlin Long who shot to fame for drafting Wyoming’s blockchain legislation has decided to launch the US’ own bank for digital assets. 

Long has begun to prepare to apply for the Special Purpose Depository Institution [ SDPI ] with Wyoming’s banking division. The digital asset bank, titled Avanti, will aim to provide regulated services for virtual assets in the state. Avanti will collaborate with Adam Back’s Blockstream to provide digital asset services to its users.

According to Long:

“I’ve founded Avanti with key support from top people in crypto and important innovators from traditional finance. Seed funding round recently closed. Avanti will serve institutional customers that need services around Bitcoin and cryptoassets. Thanks to the wise Wyoming legislature and Governor Gordon, Wyoming paved the way for such banks to exist via its special-purpose depository institution (SPDI) law.”

Avanti is expected to be launched sometime in 2021 with plans to improve the ecosystem already in operation. The cryptocurrency bank has already raised one million in seed funding with more prospective investors in waiting. Long claimed that the burgeoning cryptocurrency industry was too hard to ignore and it was high time that people tap into it.

Long believed that the United States banks and trust companies just did not have the resources to navigate the fintech world. She claimed that Avanti will enable the US to compete with other crypto-interested countries such as China and Japan. The Wyoming SPDI on their part has placed stringent requirements for the bank to pass before it can come to fruition.

The association with Blockstream will allow multiple features to be integrated into Avanti. These features include multisig signing-as-a service and upcoming native Blockstream features. Avanti’s policies list that it wants to be fundamentally different from mainstream banks by providing cutting edge technology to its account holders.

Proponents of the field have begun studying what Avanti can offer to the cryptocurrency populous on launch. The partnership with Blockstream will enable Avanti to build adjacent APIs and conventional banking APIs. Adam Back, the CEO of Blockstream also announced that they will push everything to make Avanti a one-stop-shop for cryptocurrency custody.