Key facts:
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The firm traded 26,000 BTC miners to reach a hash rate of 549 PH / s.
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The acquired equipment will be deployed in the cities of Xinjiang, Sichuan and Gansu.
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Video game operator The9 Limited, the first licensed in China to distribute World of Warcraft from Blizzard, signed five agreements to acquire 26,000 Bitcoin (BTC) mining equipment. With this agreement, the company plans to enter the cryptocurrency mining business.
In the first instance, The9’s ambitious plan is produce a hash rate of approximately 549 petahashes per second (PH / s). In this way, it aims to achieve a mining capacity of 0.36% of the global computing power of the Bitcoin network, as the company points out in a release published yesterday, January 25.
To achieve its objectives, the Nasdaq-listed company signed agreements with great industry insiders such as Jianping Kong and four other former executives of the ASIC manufacturer Canaan. The signed documents state that The9 will pay for the teams with Class A common shares which will be transferred to each of the owners of the machines.
Previously the company had indicated that former Canaan executives will receive more than 8,000,000 Class A common shares and guarantees in exchange for the mining equipment. These will become the property of NBTC Limited, the new subsidiary with which The9 will venture into the cryptocurrency mining industry.
Most of the acquired mining machines will be installed in the Chinese cities of Xinjiang, Sichuan and Gansu, the statement added.
Jun Zhu, president of The9 said that the future plan is to establish a mining farm capable of producing between 8% and 10% of the world’s computing power of BTC, 10% of Ethereum’s global hash rate and 10% of Grin’s overall hash rate.
When all the agreements signed with the former Canaan executives are finalized, The9 is expected to obtain a total consideration of approximately USD 34 million, the note said.
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Bitcoin mining a plan of salvation?
The9 deals come two months after having received a notice of market capitalization deficiency by Nasdaq’s rating division. It was a warning that the firm did not meet the requirement to maintain a market capitalization minimum of $ 35 million.
The notice stated that, according to Nasdaq rules, the company has a period of 180 days, or until May 11, 2021, to once again meet the minimum market capitalization requirement.
After announcing his plan to establish a mining farm for bitcoin and other cryptocurrencies, The9 shares rose 20.8% during the trading day on Monday in the United States. The company figure among the 84 winners of the stock trading that day.
The turn resembles similar moves made by various U.S. publicly traded companies to enter Bitcoin mining amid the 2017 BTC price rally, such as Bioptix, which was rebranded as the Riot Blockchain. The company exited the biotech sector to enter the blockchain industry.
As The9 establishes its new business, the concentration of Bitcoin mining in China gradually and steadily decreases. This is because the industry is growing in other territories, including the Nordic countries. As CriptoNoticias has reported, there are also advances in the United States that could enhance the development of the activity.
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