Hut 8 Expands Partnership with Bitmain, Unveils New ASIC Miner

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Veronika Rinecker

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Veronika Rinecker

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Veronika Rinecker is based in Germany and studied international journalism and media management. She specializes in reporting on topics such as politics and regulation, energy, blockchain, and...

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September 18, 2024

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Hut 8, one of North America’s largest Bitcoin miners, announced that it was expanding its partnership with leading mining rig manufacturer Bitmain.

According to Hut 8’s announcement from Sept. 19, the collaboration resulted in the launch of the U3S21EXPH, a next-generation ASIC miner designed to increase efficiency and reduce costs.

Hut 8 plans to deploy the model in the second quarter of 2025 through a 15 exahash per second (EH/s) hosting agreement leveraging custom data center infrastructure developed in-house by Hut 8.

The Most Efficient ASIC Miner Yet

U3S21EXPH is the first ASIC miner to feature direct liquid-to-chip cooling within a U form factor, making it a more compact and energy-efficient solution.

The new miner is capable of achieving up to 860 terahash (TH/s) at an efficiency of 13 joules per terahash, significantly outperforming many other ASIC miners on the market. This efficiency rating translates to lower energy consumption and reduced operating costs for miners.

By incorporating artificial intelligence (AI) into data center operations, Hut 8 aims to further optimize efficiency and reduce costs.

“Our partnership with Bitmain has been instrumental in advancing our thinking on ASIC compute and creating a more scalable model for data center design,” said Asher Genoot, CEO of Hut 8.

The initial agreement for the U3S21EXPH is expected to increase Hut 8’s hash rate under management from 18.5 EH/s to around 33.5 EH/s. As the company prepares for the challenges ahead, including the increased difficulty of the Bitcoin network, the U3S21EXPH offers a potential solution to improve efficiency and maintain profitability.

Bitcoin Miners Seek New Revenue Streams

The Bitcoin (BTC) mining industry is facing increasing financial pressures due to reduced block subsidies and rising energy costs. Many mining companies, including Hut 8, are responding by exploring alternative revenue streams and diversifying their operations.

One of their strategies is to increasingly diversify into high-performance computing (HPC) and AI data business models. By leveraging their powerful infrastructure for broader applications, these miners seek to secure more stable revenue streams and potentially higher returns.

According to investment firm VanEck, the potential upside for publicly traded Bitcoin miners diversifying into AI and HPC is significant. Over a 13-year period, these companies could generate additional annual profits exceeding $13.9 billion by 2027.

In addition to the partnership with Bitmain, Hut 8 secured a massive investment of $150 million from Coatue Management. This funding, secured through a convertible note agreement in June 2024, will be used to develop the company’s next-generation energy and AI infrastructure platform.