One of the things that make the crypto industry stand out is the fact that it doesn’t need a third party to confirm transactions. Instead, it makes use of miners that solve algorithms and confirm transactions. And because of their efforts, crypto miners are rewarded cryptocurrencies for their efforts. This can be an expensive venture. In fact, gone are the days of having a profitable mining rig in your basement.
Giga Watt is one of the biggest names in Central Washington during the Bitcoin boom. Last October, the company was in bullish as crypto price was headed up. International investors wanted to have a piece of the action. During that time, the company was able to raise millions of dollars and even had 62 employees at one point.
The company aimed towards having 24 different prefabricated buildings that will house crypto mining hardware. The crypto mining site was located near the Douglas County airport. Giga Watt was founded by a former programmer named Dave Carlson.
2018 Is a Different Story for Miners
2018 is a different story for the company. It has laid off 80 percent of its staff and decided to stop all construction. In fact, Carlson stepped down in August. The company was affected mainly by the bearish market. At one point, Bitcoin was able to reach up to near $20K in mid-December. However, by the time 2018 entered, the crypto market went bearish primary because of the regulatory changes from different parts of the globe.
According to George Turner who will be running the company until there’s a new CEO, the company is going to be doing “some radical changes”. He also added that “It will become very clear to us these last few months that we couldn’t wait”.
As for Carlson, he left Giga Watt because he “wasn’t able to effect what I felt strongly was the right direction” for his firm. Unfortunately, a lot of the problems that Giga Watt is dealing with are mostly self-inflicted. For instance, the company was in debt amounting to almost $5 million. Most of the debt happened due to the construction costs and delays on the pod project.
There are also lawsuits. Giga Watt raised funds via ICO using their own cryptocurrency. Around $22.6 million was raised by the company then. The company was also able to receive in Bitocin and Ethereum. What this allowed the investors is an opportunity to use their hosting services at a discounted price when mining.
ICOs have drawn scrutiny over the years mainly from regulators because a lot of these ventures can be considered securities. Also, a lot of these ICOs were considered scams. According to lawsuits against Giga Watt, the sales violated securities laws.
Dealing with a bearish market is mainly the reason for the demise of Giga Watt. In fact, a lot of mining companies are losing money. There are those miners that are simply holding on to their cryptocurrency in order to have the opportunity to gain the losses that they’ve incurred due to the bearish market. Many are still hoping that there will be a bull run soon considering the possibility of a Bitcoin ETF approval and institutional investors investing in cryptos.