MGT Capital is having a change of plans over its international expansion plan. The giant Bitcoin mining company has decided against expanding its mining operations into Sweden. The change of heart comes as a surprise given that Sweden boasts one of the lowest energy costs ideal for cryptocurrency mining.
MGT Capital Bitcoin Mining Plans
The Bitcoin Company has since terminated its contracts with Swedish businesses. The company has also started to ship its mining equipment to North America where it plans to concentrate mining operations.
The company has since switched attention to its original mining facility in Central Washington. It is also exploring new locations in the U.S and Canada. While mining costs is one of the reasons why MGT Capital shelved Sweden expansion plans, other factors also played a role.
For instance, failure to get an experienced hosting vendor and engineering errors are some of the factors. Costs of maintenance and management also outweighed the benefits of mining in the European nation.
?While the facility was able to produce Bitcoin, running a total of 50 Ph/s for all miners, the costs of rectifying vendor errors has required large outlays of capital with uncertain returns,? MGT Capital in a statement.
Bitcoin Price Implosion
The change of plans comes at a time of growing uncertainty over cryptocurrencies. Bitcoin price has imploded from record highs of $20,000 to lows of $6300. The plunge in price means the mining business is not as lucrative as it used to be.
The difficulty of coming up with new blocks has also made miners rethink cryptocurrency mining operations altogether. Bitcoin network has grown by a factor of six driving mining difficulty to another level altogether. What this means is that miners have to spend more time and energy just to come up with a new block.
Mining costs have also skyrocketed in recent months on more people as well as big firms venturing into the trade. Demand for ASIC miners has essentially increased the overall cost of Bitcoin mining hardware. Last year a miner only required 12 Bitmain s9 miners to launch a profitable mining operation. Now, firms require up to 80 mining rigs to generate some profits from the trade.