March 19 update: the previous version of this article incorrectly stated that Bladetec expects to cover the mining farm’s entire setup cost by selling its equipment and incorrectly quoted John Kingdon as saying that “investors don’t risk losing any money.” The article has been edited to correct the above statements.
Bladetec, a British IT hardware supplier, has recently revealed plans to build a Bitcoin (BTC) mining farm in the South East of United Kingdom, The Sunday Telegraph reported March 17.
The project dubbed the Third Bladetec Bitcoin Mining Company Ltd (TBBMC) aims to raise £10 mln or roughly $13.9 mln from investors to build and operate the farm for the next two to three years. Over that period, the company expects to be able to mine 1,280 bitcoins, approximately equal to $11 mln at today’s exchange rates.
The developers then plan to sell off the mined coins as well as the mining equipment to provide investment returns, says the funding platform for the project, Envestry.
Bladetec founder John Kingdon claims that despite the negative difference between the mining farm’s setup cost and its expected returns, the investors should still be able to turn a profit, after the sale of the equipment is accounted for.
TBBMC expects investment returns to follow one of four scenarios depending on the value of Bitcoin in the next two years. The scenarios range from a per annum price drop of up 40 percent, to a per annum price increase of over 50 percent.
Founded in 2002, Bladetec has provided IT support, supplying, and consulting services to such bodies as the UK Ministry of Defence, NATO, and The National Grid. According to Evenstry, TBBMC will be the first Bitcoin mine in Europe funded by investors in a limited company protected by UK law.
According to the project, the TBBMC facility will cover 3,500 square feet at three locations in London, Surrey, and Suffolk. Considering the high price of mining one bitcoin in the UK, which reportedly amounts to about $8,400, most of the raised funds would be spent on energy costs, as the company is planning to mine 1,280 bitcoins, writes The Telegraph.