BitFury raises another $6 million in latest funding round

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BitFury is furiously raising massive amounts of cash, having just secured an additional $20 million dollars in funding, making it by far and away the most well-funded bitcoin mining operation in the world. BitFury has now managed to raise more than $60 million dollars in funds over the last three years.

The next closest rival is KnCMiner, which has raised an impressive $29 million dollars on its own. In total, it’s estimated that $116.5 million dollars has been invested in mining operations, so BitFury has actually managed to lock up more than half of all investments.

The funding is coming from a group of serious investors and venture capital firms. Not all of the names have been made publicly available, but we know that the Georgian Co-Investment Fund, as well as iTech Capital and DRW Venture Capital, participated in this round of funding. All three of the companies participated in funding rounds in May and October of 2014, so they must see value in their investments.

BitFury is planning to use the funds to acquire a new 100MW data centre in the Republic of Georgia, a country close of Russia and the Middle East, and a former member of the Soviet Union. The company was founded by Valery and Vavilov Nebesny in 2011.

Back in August of 2014 BitFury estimated that it was responsible for mining 40 percent of all new bitcoins. Now, some analysts estimate that BitFury actually producing more blocks on the blockchain than all other private miners combined.

Currently, bitcoin’s relatively low value is making it difficult for miners to produce profit margins. This is especially true for small scale miners who lack the most energy efficient hardware. Many smaller miners have actually been pushed out of the industry, with mining now dominated by a small number of mining operations and companies.

As designed, mining production and the increasing supply of bitcoin has remained relatively steady. Nearly 14.5 million bitcoins have been mined so far, bringing the total market capitalization of bitcoin to nearly $4 billion dollars. Bitcoin had a market cap of over $8 billion dollars just a year ago, even though the supply of bitcoins in circulation at that time was much smaller, but prices have since cooled off.

While BitFury is dominating the market right now, there’s still some competitors left who are giving the company a run for its money. KnCMiner recently showed off plans for an 18,000 square foot facility in Europe that will actually use Arctic air to cool down the mining facility. Keeping mining rigs cool is one of the biggest costs associated with mining.

This defers from BitFury’s approach, which uses high performance 28nm chips operating at a stable temperature using “emersion cooling technology” that was developed by its own subsidiary, Allied Control. Ultimately, who wins this battle of technologies may may become the firm becomes the biggest mining outfit on the block.

BitFury already has another mining facility in Georgia, and a third mining facility in Iceland. These data centres have afforded the company a massive amount of clout in the mining industry, and BitFury plans to maintain its top position by doubling its performance-per-watt every six to twelve months.

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Brian Booker

An international financial analyst and writer. He has consulted for the Malaysian government, various MNC's, and other organisations. He focuses on currencies, commodities, and emerging South East Asian markets.

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