Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 563

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 1A
Chunk 563
---
 a build-to-suit 5MW Tier-3 data center expansion project near Montreal,
Canada.

We use a well-defined set of criteria to select
our data center sites. We actively target sub-20MW sites with proximity to metro areas and partial infrastructure in place, where we are
retrofitting rather than developing greenfield projects. A retrofit entails sourcing and acquiring an existing industrial building with
underutilized, in-place power connectivity. Our average build time for retrofits is six months, which we believe is approximately one-third
to one-half of the industry average development timeline for greenfield projects. We are also developing a proprietary software capability
that will link clusters across multiple sites, leveraging existing dark fiber networks connecting smaller data centers within a radius
of approximately 700 kilometers. By productizing cross-data center operation, we intend to create a single supercluster, enabling us to
sidestep potential fragmentation problems and dynamically “borrow” compute or storage resources from any site. We also prioritize
sites offering opportunities to increase site power over time, enabling our HPC data centers to grow with customer demand. In addition,
we selectively target certain larger opportunities with 50MW of power or more, subject to customer demand, to drive AI-driven compute
super-clusters. Finally, we target sites powered by sustainable, green energy sources.

Digital Asset Business

The digital asset business segment of the Digital Infrastructure Business (the “Digital Asset Business Segment”) is comprised
primarily of two distinct but highly complementary operations: (i) digital asset mining (the “Digital Asset Mining Operations”);
and (ii) ETH staking (the “ETH Staking Operations”).

Digital Asset Mining Business

We commenced our bitcoin (“BTC”) mining
business in February 2020. We initiated limited Ethereum mining operations in January 2022, however discontinued the operations by September
2022 due to Ethereum blockchain switching from proof-of-work (“PoW”) consensus mechanism to proof-of-stake (“PoS”)
validation. Our mining operations, hosted by third-party providers, use specialized computers, known as miners, to generate digital assets.
Our miners use application specific integrated circuit (“ASIC”) chips. These chips enable the miners to apply high computational
power, expressed as “hash rate”, to provide transaction verification services (generally known as “solving a block”)
which helps support the blockchain. For every block added, the blockchain provides an award equal to a set number of digital assets per
block. Miners with a greater hash rate