UK Edition
Entrepreneurs plan to build Britain's biggest Bitcoin farm
A team of of entrepreneurs is planning to build a £10m Bitcoin farm in the South East that it claims will be the biggest in the UK.
Bladetec, a company set up in the early 2000s that has supplied high-powered IT equipment to the Ministry of Defence and Nato, is aiming to build the 3,500-square foot facility across three locations in London, Surrey and Suffolk.
Bitcoin farms are rows of purpose-built computers set up to generate new Bitcoins, a process called “mining” in which the computers are rewarded for solving the cryptographic equations that keep the Bitcoin network running.
Bladetec plans to raise £10m from investors to build and operate the farm for up to two years, after which it will sell the Bitcoins it generates, as well as the computers.
Over that time it believes it can mine 1,280 Bitcoins, which will be worth £7.5m at Friday’s price of $8,200 (£5,875). John Kingdon, Bladetec’s founder, said this would not mean investors losing money, since sales of the mining equipment would result in an overall profit, but that investors would make more if Bitcoin’s price rises.
The project is being offered as a way for investors to back Bitcoin without having to own the controversial cryptocurrency itself, with the coins sold when the farm is closed down.
Bitcoin farms are typically set up in geographies where electricity is cheap or where cold conditions save on the cost of cooling the machines such as China, Iceland and Canada.
Bladetec said it had secured deals with wind farms to buy electricity below the market rate, and that its experience operating servers means it can run the farm efficiently. Energy costs will still make up the majority of the £10m project, however, with the farm expected to have an energy consumption equivalent to almost 9,000 houses. It will house up to 2,000 machines.
Bitcoin’s price rose dramatically last year from under $1,000 to almost $20,000 but has since fallen to under $9,000.