Fortitude, a Zcash miner backed by Digital Currency Group, has launched a 12 MW mining facility in Nebraska [1, 2].
The move represents a strategic shift to lower the overhead of Zcash production. By securing cheaper energy, the company aims to maintain profitability in a competitive mining environment where operational costs can dictate the viability of a network's security.
The new facility is designed to significantly reduce the direct cash mining cost per ZEC. Fortitude said its new 12-megawatt mining facility is expected to cut those costs from about $70 to roughly $40 per ZEC [1].
This reduction is primarily driven by the site's energy efficiency and local power pricing. The company is leveraging an electricity rate of $0.045/kWh to achieve its goals [2]. This pricing structure allows the firm to target a total production cost reduction of 43% [2].
Zcash mining requires substantial computational power to secure the privacy-centric network. By scaling its infrastructure in Nebraska, Fortitude is positioning itself to produce coins more efficiently than previous operations, a necessity as mining difficulty typically increases over time.
The company's backing by Barry Silbert's Digital Currency Group provides the capital necessary for such industrial-scale expansions. The operational status of the Nebraska site marks the completion of this specific capacity increase [1].
“Fortitude expects its new 12-megawatt mining facility to cut its direct cash mining cost from about $70 to roughly $40 per ZEC.”
The launch of this facility highlights the critical role of energy arbitrage in cryptocurrency mining. By moving operations to regions with lower kilowatt-hour costs, mining firms can lower their break-even point, allowing them to remain operational even if the market price of the asset drops. This industrialization of Zcash mining suggests a move toward greater centralization of hash power among well-funded entities like those backed by DCG.
