Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 223

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 1
Chunk 223
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Risks Associated with the Ethereum Network

Dependence on Ethereum
Network Developers

While many contributors
to the Ethereum network’s open-source software are employed by companies in the industry, most of them are not directly compensated
for helping to maintain the protocol. As a result, there are no contracts or guarantees that they will continue to contribute to the Ethereum
network’s software (https://github.com/ether and https://github.com/orgs/ether/people). 

Issues with the
Cryptography Underlying the Ethereum Network

Although the Ethereum
network is one of the world’s most established digital asset networks, the Ethereum network and other cryptographic and algorithmic
protocols governing the issuance of digital assets represent a new and rapidly evolving industry that is subject to a variety of factors
that are difficult to evaluate. In the past, flaws in the source code for digital assets have been exposed and exploited, including flaws
that disabled some functionality for users, exposed users’ personal information and/or resulted in the theft of users’ digital
assets. The cryptography underlying ETH could prove to be flawed or ineffective, or developments in mathematics and/or technology, including
advances in digital computing, algebraic geometry and quantum computing, could result in such cryptography becoming ineffective. In any
of these circumstances, a malicious actor may be able to take the ETH held by the Company. Moreover, functionality of the Ethereum network
may be negatively affected such that it is no longer attractive to users, thereby dampening demand for ETH. Even if digital assets other
than ETH were affected by similar circumstances, any reduction in confidence in the source code or cryptography underlying digital assets
generally could negatively affect the demand for digital assets and therefore adversely affect the business of the Company.

51

Disputes on the
Development of the Ethereum Network may lead to Delays in the Development of the Network

There can be disputes
between contributors on the best paths forward in building and maintaining the Ethereum network’s software. Furthermore, the stakers
supporting the network and other developers and users of the network can disagree with the contributors as well, creating greater debate.
Therefore, the Ethereum community often iterates slowly upon contentious protocol issues, which many perceive as prudently conservative,
while others worry that it inhibits innovation. It will be important for the community to continue to develop at a pace that meets the
demand for transacting in ETH, otherwise users may become frustrated and lose faith in the network. As a decentralized network, strong
consensus and unity is particularly important