Company: BTBT
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044155
Chunk: 67

Company: Bit Digital, Inc
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 67
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 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 generally have a higher chance of solving a block and receiving an award.

We operate our mining assets with the primary intent of accumulating
digital assets which we may sell for fiat currency from time to time depending on market conditions and management’s determination
of our cash flow needs, and/or exchange into ETH or USD Coin (“USDC”). Our mining strategy has been to mine bitcoins as quickly
and as many as possible given the fixed supply of bitcoins. In view of historically long delivery lead times to purchase miners from manufacturers
like Bitmain Technologies Limited (“Bitmain”) and MicroBT Electronics Technology Co., Ltd (“MicroBT”), and other
considerations, we have chosen to acquire miners on the spot market, which can typically result in delivery within a relatively short
time.

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We have signed service agreements with third-party
hosting partners in North America and Iceland. These partners operate specialized mining data centers, where they install and operate
the miners and provide IT consulting, maintenance, and repair work on site for us. Our mining facilities in New York are maintained by
Digihost Technologies Inc. (“Digihost”). Our mining facilities in Texas are maintained by Dory Creek, LLC, a subsidiary of
Bitdeer Technologies Group (“Bitdeer”) and A.R.T. Digital Holdings Corp (“KaboomRacks”). Soluna Computing, Inc
and DVSL ComputeCo, LLC (collectively “Soluna”) maintained our mining facilities in Kentucky and Texas. Our mining facility
in