Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 211

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 1
Chunk 211
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-based global supply chain for bitcoin hardware on the spot market or otherwise occur, we may not be able to obtain adequate
replacement parts for our existing miners or to obtain additional miners from the manufacturer or third parties on a timely basis. Such
events could have a material adverse effect on our ability to pursue our business strategy, which could have a material adverse effect
on our business and the value of our Ordinary Shares.

The bitcoin we
mine is subject to halving; the bitcoin reward for successfully uncovering a block will halve several times in the future and bitcoin’s
value may not adjust to compensate us for the reduction in the rewards we receive from our mining efforts.

Halving is a process
designed to control the overall supply and reduce the risk of inflation in digital assets using a proof-of-work consensus algorithm. At
a predetermined block, the mining reward is cut in half, hence the term “halving.” For bitcoin, the reward was initially set
at 50 bitcoin currency rewards per block and this was cut in half to 25 on November 28, 2012 at block 210,000 and again to 12.5 on July
9, 2016 at block 420,000. The next halving for bitcoin occurred in May 2020 at block 630,000 when the reward was reduced to 6.25. This
reward rate was halved during April 2024 to 3.125 bitcoin per new block and will continue to halve at approximately four-year intervals
until all potential 21 million bitcoin have been mined. If the award of bitcoin rewards for solving blocks and transaction fees are not
sufficiently high, we may not have an adequate incentive to continue mining and may cease our mining operations. Halving may result in
a reduction in the aggregate hash rate of the bitcoin network as the incentive for miners decreases. Miners ceasing operations would reduce
the collective processing power on the network, which would adversely affect the confirmation process for transactions (i.e., temporarily
decreasing the speed at which blocks are added to a blockchain until the next scheduled adjustment in difficulty for block solutions)
and make bitcoin networks more vulnerable to a malicious actor or botnet obtaining control in excess of 50% of the processing power active
on a blockchain, potentially permitting such actor or botnet to manipulate a blockchain in a manner that adversely affects the network
and our activities. A reduction in confidence in the confirmation process or processing power of the network could result and be irreversible.
Such