RIOT On a Rampage: BitFarms Calls Out RIOTs Attempts to Centralize Bitcoin Mining

In the cut-throat arena of Bitcoin mining, Bitfarms and Riot Platforms Inc. are upping the ante.

Bitfarms has sealed a $175 million deal to acquire Stronghold Digital Mining, fortifying its position against Riot’s hostile takeover attempts. They say these are centralizing BTC mining.

“Our recent proposed acquisition of Stronghold is consistent with our strategy to diversify our access to power and also rebalances our energy portfolio towards the U.S.,” Bitfarms said.

All of this hoopla has allowed critics to pounce, saying BTC will collapse when the fees and centralization of mining power make it clear that Satoshi’s vision is unfulfilled. The sentiment is that whichever L1 is the clear replacement when that time comes (and it will) is the one to buy now.

Riot’s Takeover Attempts and Response to Bitcoin Mining Centralization

Since April, Riot has aggressively pursued a takeover of Bitfarms, starting with an unsolicited $950 million bid. Despite initial rejection, Riot remains relentless, buying up stock and seeking influence over the board.

“As Bitfarms’ largest shareholder, we are concerned that the Bitfarms Board did not enter into this transaction with the best interests of Bitfarms’ shareholders in mind,” Riot stated.

Bitfarms changes its leadership because of pressure from Riot Platformshttps://t.co/8GS2pDWBkV #bitfarm

— 4C Media Co. (@4cmediaco) August 14, 2024

With profits dwindling after the Bitcoin halving, the mining industry is in a frenzy. Firms are aggressively pursuing mergers and acquisitions to secure their market position.

Meanwhile, Riot is warning of potential risks to shareholder interests, but Bitfarms claims its decisions prioritize shareholder value without bowing to Riot.

“Riot has declined to engage with us constructively—including by refusing to enter into a standard non-disclosure agreement,” Bitfarms claimed.

All The Original Values That Made Bitcoin Great Have Changed

Decentralization of mining was obviously part of Bitcoin’s original value proposition. ”One CPU, one vote,” and everyone could join in with their personal computer. Great idea—yet it’s not happening anymore.

The first challenge was the introduction of ASICs. You couldn’t mine with your personal computer anymore. Okay, mining can still be decentralized; all the true believers can just buy a few ASICs.

But once again, this is not happening, as the big mining centers have too much power.

Each big mining center is a point of failure and less secure than if the same miners were distributed to thousands of individual miners across the globe. This is the point of decentralization. The point of making joining the network permissionless is that everyone can mine.

Obviously, we’re never returning to that world – yet it is something to watch for if you own BTC.

The next pivotal moment in this corporate saga is Bitfarms’ upcoming special meeting on October 29, where Riot can nominate directors to Bitfarms’ board. This meeting could be a turning point in the power struggle between the two biggest mining players.

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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.