The all-stock deal will give Marathon additional scale and halve its mining cost from $7,400 per Bitcoin to $3,600 per bitcoin.

Marathon Patent Group, Inc. (NASDAQ: MARA) will acquire Fastblock Mining for approximately $22 million in an all-stock deal. Marathon will issue 8,658,009 shares to Fastblock, a mining-as-a-service company, in a private placement transaction. Marathon shares closed Wednesday at $2.54. (Bitcoin.com)

Electricity cost advantage

After the closure of the deal, Marathon will enjoy a “lower than industry-standard electricity cost of $0.0285 per kWh,” it said in a statement.

Energy is the single most valuable component of the cost of mining bitcoins. The cost advantage from the deal will enable Marathon to lower its cost of production from $7,400 to $3,600/Bitcoin.

Race to grab scale

There appears to be a race on to grab top honors for crypto mining scale in North America.

The deal with Fastblock will add 3,304 ASIC miners to Marathon’s own count of 2,060. It will bring its total rig count to 5,364 units.

Earlier this month, the company announced its purchase of 10,500 next-generation Antminer S-19 Pro models for $23 million from Chinese ASIC mining manufacturer Bitmain.

At the time, Merrick Okamoto, Marathon’s Chief Executive Officer, said the investment “is expected to result in Marathon being one of, if not the largest, bitcoin miner in North America,” according to Bitcoin.com.

Meanwhile, earlier this week, listed rival Riot Blockchain (NASDAQ: RIOT) also purchased 8,000 of Bitmain’s Antminer S19 Pro bitcoin miners in a $17.7 million deal.

Solid profits at Marathon?

Marathon said that it would produce 1639/Ph (Petahash) if all its 16,960 ASIC miners could be deployed today.

“At today’s Bitcoin price and the network’s current Hashrate Difficulty, [Marathon] would produce approximately 16 Bitcoin per day and generate monthly revenue of $4,000,000 per month. With a monthly power cost of $1,127,000, this could result in monthly Gross Profits of more than $2,800,000 per month,” the crypto miner claimed.

According to Okamoto, the company was well-capitalized with its own facility and had locked in low power costs.

“Now we have one of the most experienced Bitcoin mining teams to run our operations,” he added.

Under the terms of the deal, Fastblock Mining CEO and Co-Founder Bernardo Schucman will be Head of Mining Operations at the combined company. Fastblock’s executive team, consisting of John Blount and Gustavo Caldeira de Andrada, along with the 14 employees at the Atlanta facility, will continue to work at Marathon.

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Image: Fastblock mining facility