The company’s strategy collided with the current sharp decline of bitcoin prices, which in fact put a huge impact on its overall performance, the thing that seemingly resulted in coming to such a decision of leaving the market.
November 26, 2018 AtoZ Markets- The pioneer bitcoin mining company GigaWatt has recently filed for bankruptcy, after its creditor claims reached $7 million, where it currently holds less than $50,000 in assets.
The move, which follows the leave of its co-founder David Carlson in last August, refers to selling the company later, as analysts expect, amid proceedings of eviction from the Port of Douglas County.
The story of the company began when Carlson took mining bitcoin as a personal hobby in 2012, which allowed him to touch what outcome he could get out of the cheap hydro-electric power in the state of Washington.
Based on his expertise in the tech field, being a former engineer for Microsoft, Carlson managed in 2013 to build the largest bitcoin mine in Wenatchee, making use of an old furniture store.
As a result of the reduced cost of energy, his company did not take long till it expanded to be a host for other services miners needed, where electricity is priced for less than a quarter of the national average in central Washington.
Winds blow counter to what ships desire!
According to GigaWatt’s reports, in parallel with the price booming of bitcoin in 2017, the company planned a multi-million dollar expansion strategy on a nine-acre plot in Douglas County.
With the authorities supporting the scheme to create “24 prefabricated pods” for miners to set up their operations, the mining firm could raise $22.6 million dollars in an ICO, which gave the company a solid base for issuing tokens that are redeemable for discount hosting services.
As a result of the falling prices of bitcoin recently, clients and traders seem to have receded, and consequently, construction delays and budget overruns constituted a stick in the wheels for the company to complete the hosting pods, which triggered several lawsuits against it by the investors.
On the other hand, the overall trend for crypto mining has witnessed some change in the state of Washington recently, where some of the prominent firms in the industry have become not as welcome today as they used to be in the past, which is accompanied by higher tariffs for ‘evolving industries’ imposed by Grant County lately.
In his turn, the Port Executive Director expressed his hopes that there will be a way for completing the project, either by GigaWatt or another firm.
“The goal would be to have the project in some way shape or form completed so that it is a productive use for both the port district, in terms of lease revenue, but also providing jobs and economic growth for the community at large”, said the aforementioned Director.