[Architect Partners: Bitcoin mining is in the consolidation stage]
The report pointed out that the Bitcoin mining industry is in the midst of a wave of mergers and acquisitions, with miners hoping to obtain large data center capacity, low-cost power and capital. These resources become more available as a company grows in size.
Recently, Bitfarms (BITF) planned to acquire Stronghold Digital Mining (SDIG), which reflects the trend of consolidation. Earlier, Riot Platforms (RIOT) made an unsolicited proposal to acquire Bitfarms and acquired 19% of its shares in an attempt to replace management and board members. In response, Bitfarms announced the acquisition of Stronghold and made management changes.
The report warns that hostile mergers and acquisitions may face complexities in the mining industry. Unlike the technology and financial services industries, the core assets of Bitcoin mining are the physical facilities and computing equipment with electricity access. The report emphasizes that the centralization trend of Bitcoin mining is contrary to Satoshi Nakamoto’s original intention of decentralization.
At present, the impact of mining concentration is yet to be felt. The report mentioned that Jack Dorsey and the Block (SQ) he founded are working hard to "build semiconductors and systems that support the decentralization of mining" to combat this trend.
