The Canadian firm will take control of all CoinGeek operations, including 62,440 ASIC mining devices.

Squire Mining, a Vancouver-based company that designs ASIC chips, is to purchase CoinGeek, a cryptocurrency news site and mining pool operator.

This is significant because Squire Mining (market capitalisation $35.4 million) shares are traded on a number of stock exchanges worldwide, so this deal has created the world’s biggest publicly traded cryptocurrency mining operation. Bitmain of Beijing, the biggest mining entity in the world, is still waiting for approval to go public in Hong Kong.

Sixty two thousand machines

Squire Mining and CoinGeek first went into partnership in August. Under the terms of that deal, CoinGeek became the sole distributor of Squire Mining products. The new deal involves Squire Mining taking control of CoinGeek’s operations and employees, as well as 62,440 ASIC mining devices located on sites in Canada, the US, and Kazakhstan. These machines reportedly have a combined hashrate of around 1 million terrahashes per second, according documents made public by the company.

The deal also gives Squire Mining right of first refusal on other assets held by CoinGeek, valid for a year after the close of the deal.

The acquisition is costing Squire Mining an estimated $45.3 million.

Something in the Ayre

CoinGeek was purchased in August 2017 by Calvin Ayre, a Canadian billionaire who made his fortune with an online gambling operation. Ayre was a big supporter of Bitcoin Cash, the somewhat controversial spin-off of Bitcoin, and more recently became a big supporter of Bitcoin Satoshi Vision, the very controversial spin-off of Bitcoin Cash.

Ayre began CoinGeek’s mining operation in January 2018 specifically to support the Bitcoin Cash blockchain, and it soon became the biggest contributor of computing power to this network. When this chain split, CoinGeek switched its power to processing transactions for Bitcoin Satoshi Vision.

Regarding the acquisition, Ayre said: “I believe the next phase of growth for this industry is upon us and that means massive scaling of the Bitcoin blockchain to accommodate the throughput needed for enterprises to make use of this technology. By vending my mining and CoinGeek branded assets into Squire, I would be doubling-down on my commitment to Bitcoin’s success. These assets would enable Squire Mining Ltd to compete at a global level to pave a path for enterprise usage of blockchain technology to flourish.”

Squire Mining CEO Taras Kulyk said: “This transaction would provide Squire with a leading, recognized brand via the acquisition of the and CoinGeek name, but it would also make us the largest, publicly traded Bitcoin miner globally. It is expected to deliver significant shareholder value by enabling Squire to become vertically integrated with our growing chip design and manufacturing business, which we would seek to have commercial within 2019.”

Arms race

In August, Squire Mining signed a partnership with Samsung Electronics, the largest conglomerate in South Korea, under the terms of which Samsung manufactures microchips designed by Squire Mining.

ASIC (application-specific integrated circuit) chips are microchips specifically designed to handle cryptocurrency mining. Specialised devices are much more efficient at this than computers that also handle other tasks, and because cryptocurrency mining is a zero-sum game, ASIC devices are now the only way to profitably mine cryptocurrency. Manufacturers of these machines are also in competition, constantly releasing newer models which inevitably make the older ones obsolete.