Company: CIFRW
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001819989-25-000005
Chunk: 127

Company: Cipher Mining Inc.
Filing Date: 2025-02-25
Form: 10-K
Item: Item 1
Chunk 127
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O, Approved Site award from the Uptime Institute, an independent organization focused on improving 

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the performance, efficiency, and reliability of business-critical infrastructure that has established standards and performance certifications for data center design and construction.  

Our team oversees all aspects of our data center’s operations, which include data center performance, miner performance at our bitcoin mining operations, network performance and incident response management. 

Our technology team has also developed proprietary software for data center management and optimization, which provides critical real-time information on our data centers’ performance and enables us to optimize our operations. For more information on our proprietary software, see “—Intellectual Property.”  

We believe that our team’s experience and high standards for data center operations set us apart from many of our competitors. 

Revenue Structure

Currently, our revenue is derived from mining bitcoin. Specifically, we purchase electrical power and use it to run miners that produce computing power. We contribute the computing power we produce to one or more mining pools verifying transactions on the Bitcoin blockchain in exchange for block rewards and transaction fees. This means that we send our computing power, or hashrate, to the mining pool in exchange for a proportionate share of bitcoin mined by the pool. We have no immediate plans to establish our own mining pool. We intend to periodically re-evaluate this as part of our overall strategy going forward and, in the future, we may also decide to stop using mining pools. To the extent that we can produce bitcoin through mining at a cost that is lower than the market price of bitcoin, over the long term we expect to generate profits.

Block rewards are rewards paid in bitcoin that are programmed into the Bitcoin software and awarded to a miner, or a group of miners, for solving the cryptographic problem required to create a new block on the Bitcoin blockchain. Block rewards are fixed and the Bitcoin network is designed to reduce them periodically through halving. Most recently, in April 2024, the block reward was reduced from 6.25 to 3.125 bitcoin, and it will halve again, to 1.5625 bitcoin, which is estimated to occur in April 2028.

Bitcoin miners also collect transaction fees for each transaction they confirm. Miners validate unconfirmed transactions by adding the previously unconfirmed transactions to new blocks in the blockchain. Miners are not forced to confirm any specific transaction, but they are economically incentivized to confirm valid transactions as a means of collecting fees. Miners have historically accepted relatively low transaction fees, but transaction fees vary and it is