Company: FUFU
Filing Date: 2025-04-21
Form Type: 20-F
Source: 0001213900-25-033733
Chunk: 97

Company: Bitfufu Inc.
Filing Date: 2025-04-21
Form: 20-F
Item: Item 4
Chunk 97
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 computers, or
“miners,” power and secure blockchains by providing hash calculations to validate transactions on specific digital asset networks.
In order to add blocks to the blockchain, a miner must map an input data set consisting of the existing blockchain, plus a block of the
most recent digital asset transactions and an arbitrary number called a “nonce,” to an output data set of a predetermined
length using hash calculations. Providing these hash calculations results in a reward of digital assets, such as Bitcoin. These rewards
of digital assets can be sold for fiat currency. The underlying cost of mining generally consists of the cost of mining hardware, the
cost of the electrical power to operate the machine, and other facility costs to house and operate the equipment.

We have engaged in and capitalized
on mining digital assets for our own accounts since February 2022. In 2022, 2023 and 2024, our revenue generated from self-mining operations
was approximately US$60.3 million, US$100.2 million and US$157.5 million, respectively. We operate miners that perform hash calculations
in support of blockchain network measured in hash rate. The efficiency of a mining hardware is measured by the hash rate of such miner.
Miners with higher hash rate when operating at maximum efficiency have a higher chance of completing a block in the blockchain and receiving
a digital asset reward.

Currently, the likelihood
that an individual mining participant acting alone will solve a block and be rewarded a digital asset is extremely low. As a result, to
maximize the opportunities to receive a reward, most large-scale miners have joined with other miners in “mining pools”
where the hash calculations of each pool participant are coordinated to complete the block on the blockchain and mining rewards are distributed
to participants in accordance with the rules of the mining pool. Fees payable to the operator of the pool varies but are typically as
much as 0.3%~4% of the reward earned and are deducted from the amounts earned by each pool participant. Mining pools are subject to various
risks including connection issues, outages and other disruptions which can impact the quantity of digital assets earned by participants.

Through our collaboration
with third-party hosting facility suppliers and a fleet of advanced miners, we operate miners for the purpose of mining Bitcoin.
We mine and accumulate Bitcoins for our current and future financial and operational needs, based on market condition and the prevalent
price of Bitcoin.

Our self-mining operations
utilize third-party mining pools, such as Ant