Thread by @WolfieZhao

This lawsuit between GMO Internet and Riot's Whinstone offers a glimpse into their interesting and yet entangled history since the bottom of the last bear.

It shows how the current market downturn is again putting existential pressure on inefficient miners. 1/n

How big is GMO's fleet colocating at Whinstone in Texas? Its complaint filed in June against Whinstone suggested a power draw at ~50MW.

Riot's Q2 filing also suggested that just 3 customers accounted for "nearly all" of its third-party #bitcoinmining hosting revenue. 2/n

GMO is one of the first and few public co. from the tech world that set up an in-house mining biz in Dec 2017.

It mined 5,747 BTC in 2018 before taking an $80m impairment and restructuring around the year end. 3/n

GMO hashrate's peak in 2018 was ~700PH/s. As it looked to move out of Northern Europe, it signed hosting deals with Whinstone in Nov 2018 to relocate to the US. 4/n

GMO's current hashrate is unknown. But if we assume they carried the 700PH/s from the last bear and draw ~50MW in Texas, its efficiency would be ~70J/TH.

fwiw, Whinstone also alleged GMO keeps using "outdated" and "non-functioning" equipment. 5/n

No wonder GMO did not feel great when billed a surcharge of $0.15c/kWh this year, bringing total bill to $3c.

A 70J/TH efficiency stays just marginally profitable at $3c/kWh right now. 6/n

But Whinstone's hosting biz has also recorded gross loss for the past quarters.

It was fine-ish last year b/c Riot's self-mining biz can offset the hosting loss. But 2022 is different and the hosting biz has not been the hedge it was supposed to be. 7/n

In short, bear market is when all kinds of disputes come to light. In it for the 🍿 8/n

This thread sums up the high-level disputes with GMO's original complaint and Whinstone's counterclaims.

https://twitter.com/BlocksBridge_/status/1562515848962510850