Chad Everett Harris, RIOT BLOCKCHAIN losing money on miners. Check it out

No need to take my word for any of this, everything has links.

All approximate. Tell me if I messed up any calculation. Do your own research. Not financial advise.

In the Q1 financials, RIOT wrote:

Cost of revenues for mining for the three months ended March 31, 2022 and 2021 was $19.1 million and $7.5 million, respectively

In the monthly press releases, RIOT reports how many miners were running:

• Jan 5: 29,593 miners
• Feb 4: 32.552 miners
• Mar 3: 38,310 miners
• Apr 5: 42,919 miners

Take the average:

They are mostly S19j Pros. Values are similar for any of the S19 series. Using the S19j Pro:

Power: 3050W

So 35,843 miners use:

1. 35,843 x 3.05 kWh per hour = 109,321 kWh per hour
2. 109,321 kWh per hour x 24 hrs a day = 2,623,707 kWh per day
3. 2,623,707 kWh per day x 92 days in Q1 = 241,381,099 kWh in Q1

Approx of course. We can see how much RIOT’s operating cost was per miner kWh by dividing one by the other.

$19,100,000 / 241,381,099 kWh =

Go to ASIC Miner Value: S19j Pro. Scroll to the bottom, enter $0.08 / kWh, scroll back to the top:

That doesn’t count anything other than mining operating costs, not even the price of the miner.

The latest miner count was 43,458 miners:

• 43,458 x $846.20 / year = $36,774,159 / year

The next BTC halving happens in April 2024. At that point, the above table changes from $8.21 income to $4.11 income. The electricity cost remains the same. The profit becomes negative. That’s 22 months from now.

$36.77M / year x 22 months / 12 months / year = $67.4M

RIOT currently holds 6,536 BTC worth $130.7M at $20,000/BTC. Add the $67.4M and you get: $198.1M

Currently outstanding shares are 135M.

That completely ignores all non-operating expenses.

——————

Lest you say:

but RIOT will have about 82,000 more miners online by the end of the year.

Let’s look at the annual report:

During 2021, we entered into six purchase agreements with Bitmain to acquire 52,500 Antminer model S19j miners and 30,000 of their latest Antminer model S19XP miners for a combined total purchase price of approximately $535.0 million. Pursuant to these agreements, approximately $301.3 million remains payable to Bitmain in installments in advance of shipment of the miners, which is scheduled to occur on a monthly basis through December 2022. Of the remaining miners to be delivered, 48,495 new S19j-Pro model miners and 30,000 new S19XP model miners are all scheduled to be delivered throughout the year ended December 31, 2022.

So at the start of the year, that’s 82,500 total miners for which they owed $301.3M on delivery.

$301,300,000 / 82,500 = $3,652 / miner

These are miners that profit less than $1,000 / year and will be unprofitable in 22 months.

Disclosure:  This thread can be found on Reddit.  Medianista has no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours.  The views and opinions expressed herein are the views and opinions of the authors.

BASED ON OUR EXPERIENCES – DO NOT TRUST CHAD EVERETT HARRIS OR ANYTHING HE’S INVOLVED WITH!

Chad Everett Harris, Whinstone, Riot Blockchain, Northern Data AG accused of accounting fraud  Read that article here.