Durham bitcoin firm finds way around China tariffs to land new mining hardware

DURHAM – Escalating tariffs triggered by the current U.S.-China trade war might be hurting some companies, but not MGT Capital Investments.

The Durham-based bitcoin company recently announced that it had ordered 1,110 S17 Antminers – the latest “energy efficient” miners from Bitmain, China’s second largest fabless chipmaker.

However, the firm has found a way to bypass the current tension, getting its order shipped from Malaysia “without Chinese tariffs” in October, it said in its release.

Clearly, this is a boon for MGT’s investors who are banking on the company’s quick expansion into the digital currency market. It also comes at a time when bitcoin prices is on the rise, more than tripling since December.

MGT is one of the largest U.S.-based bitcoin miners. Its growth model focuses on securing low cost power and growing its crypto assets materially.

It already has facilities in Colorado and Ohio, and has begun construction on a third in Georgia this month.

“We’re confident that by developing our own efficient mining facility in LaFayette, we can support our current Bitcoin miners as well as support future expansion, without reliance on third parties,” the firm said in a release.

The bitcoin protocol

For those not in the know, bitcoin is a new currency that was created in 2009 by an unknown person under the alias Satoshi Nakamoto.

There are several perks to using bitcoin. Among them: buying merchandise anonymously and making easy and cheap international payments not subject to regulation.

However, creating bitcoins is a little trickier.

People compete to “mine” the currency by processing transactions and securing the network using specialized hardware, collecting new bitcoins in exchange.

The protocol is designed in such a way that new bitcoins are created at a fixed rate.

“When more miners join the network, it becomes increasingly difficult to make a profit and miners must seek efficiency to cut their operating costs,” MGT explains on the bitcoin website.

This is where Bitmain comes in. The Chinese firm recently released its Antminers 17 series, which MGT purchased, which promise “improved energy efficiency, higher hashrate and size compatibility.

“New miners, such as the Bitmain Antminer S17, promise over twice the computing power for the same electrical consumption, allowing each MW to translate into nearly 20 Ph/s in mining power,” MGT said.