Swan Bitcoin unveils stealth mining unit, expansion plan as halving approaches

Bitcoin financial services company Swan Bitcoin finally shined a light on its mining subsidiary, Swan Mining, which has been operating in stealth mode since last summer and has already mined more than 750 Bitcoin, it said in a statement.

Swan Mining already supplies 4.5 exahash to the Bitcoin network, which means that about one of every 100 Bitcoins mined globally comes from Swan.

“Swan Mining developed and deployed at warp speed, " said Rapha Zagury, CIO at Swan and head of Swan Mining. “Our understanding is that this is the fastest-ever initial deployment of hashrate at this scale in Bitcoin history.”

The unit has purchased and taken delivery of mining equipment that will bring its total capacity to more than 8 exahash, with full deployment expected by March.

The timing is interesting, because as DL News has reported, Bitcoin will undergo its fourth halving most likely in April.

Halving is the mechanism by which the protocol slashes by half the number of Bitcoins it gives to miners who successfully add a block to the network’s distributed ledger.

Scheduled roughly every four years, halvings have historically led to increases in Bitcoin’s price. The usual explanation: Fewer coins are mined, so fewer coins enter the market, creating a supply shock.

But with almost 93% of the total supply of Bitcoin already issued, it’s worth questioning whether the forthcoming, modest reduction from 6.25 Bitcoins to 3.125 Bitcoins given to miners per block mined will have the same impact.

The halving

Without an accompanying increase in Bitcoin’s price, the halving will simply slash mining revenues in half, while operational costs will remain the same.

Still, the funding model for Swan’s mining business uses no debt, and its entities are legally segregated from the rest of Swan’s business, according to the statement.

Zagury noted: “We bring financial expertise and operational excellence, while our investors provide equity capital to our mining unit in exchange for priority on initial payouts and continued shared upside.”

California-based parent Swan raised and deployed $205 million of capital across its equity, credit, and hedge funds last year, and currently generates $125 million of revenue annually, it said in a statement.

Swan founder and CEO Cory Klippsten said the company is actively working to achieve a public listing within the next 12 months.