Company: BTBT
Filing Date: 2025-06-09
Form Type: CORRESP
Source: 0001213900-25-052675
Chunk: 5

Company: Bit Digital, Inc
Filing Date: 2025-06-09
Form: CORRESP
Chunk 5
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 obligation
in the Company’s contracts with mining pool operators.

Contract inception and the Company’s enforceable
right to consideration begin when the Company commences providing hash calculation services to the mining pool operators. Each party to
the contract has the unilateral right to terminate the contract at any time without any compensation to the other party for such termination.
As such, the duration of a contract is less than 24 hours (a day) and may be continuously renewed throughout the day. The implied renewal
option is not a material right because there are no upfront or incremental fees in the initial contract, and the rate of payments remains
the same upon each implied renewal, as the Full-Pay-Per-Share (FPPS) formula remains the same. The Company is entitled to compensation
once it begins to perform hash calculations for the pool operator in accordance with the operator’s specifications over a 24-hour
period beginning 00:00:00 UTC and ending 23:59:59 on a daily basis. In exchange for providing computing power, the Company is entitled
to a fractional share of the fixed digital assets award the mining pool operator receives, for successfully adding a block to the blockchain.
The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator
to the total computing power contributed by all mining pool participants in solving the current algorithm. The Company is entitled to
its relative share of consideration even if a block is not successfully placed.

The transaction consideration the Company receives,
if any, is noncash consideration in the form of digital assets, net of pool fees charged by the mining pool operator. The Company estimates
the fair value of noncash consideration at contract inception. This non-cash consideration is variable since the amount of block reward
earned depends on the Company’s hash rate provided and transaction fees depend on the actual Bitcoin Network transaction fees. While
the non-cash consideration is variable, the payout is settled the next day on a daily basis and the Company has the ability to estimate
the variable consideration with reasonable certainty, without the risk of significant revenue reversal because it is probable that a significant
reversal in the amount of revenue recognized from the contract will not occur when the uncertainty is subsequently resolved.

Revenue is recognized on the same day that control
of the contracted service transfers to the mining pool operator, which is the same day as contract inception. Revenue is estimated and
recognized based on the spot price of Bitcoin determined using the Company’s Principal Market at 0:00: