Bitcoin Miner Riot Warns of Profit Risks Due to Chip Shortage and Climate Regulations
On February 23, popular Bitcoin miner Riot Platforms issued a cautionary statement regarding potential profitability challenges in its business operations. The company cited various factors, including global supply chain disruptions, chip shortages, and increasing regulatory scrutiny around climate change, as key threats to its operations.
The top Bitcoin miner resident in Texas shared this less-than-optimistic outlook on its ability to profit in 2024. In its annual investor K-10 report, Riot outlined 13 risk factors that could impact its business and financial operations.
One of these factors is the escalating hash rate required to mine a Bitcoin reward. The hash rate is the computing power necessary to solve the cryptographic puzzles that underlie every Bitcoin transaction. To cope with this, Bitcoin miners often deploy highly sophisticated Application Specific Integrated Chips (ASICs) to solve the puzzle and earn block rewards.
Riot Platforms noted that hash rates often grow exponentially as the price of Bitcoin increases. The network’s hash rate has surged due to the renewed interest in the foremost digital asset.
Riot Platforms has stated that if it fails to grow its current 12.4 exahash (EH) per second, its operations could be adversely impacted. The game plan to combat this is acquiring new and more efficient ASIC miners to boost their capacity to mine Bitcoins successfully.
Another factor the annual report considers is the global supply chain issue prompted by the Covid-19 pandemic. With several countries recovering from the lockdown, the global supply chain has changed.
This has resulted in a constrained supply of semiconductors needed to produce highly specialized ASIC machines. With constrained semiconductor
Read more on cryptonews.com
