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Mining Business Compute North Goes Bust by chekohler

View this thread on: hive.blogpeakd.comecency.com
· @chekohler ·
$4.98
Mining Business Compute North Goes Bust
In today's edition of YIYL (You Invest, You Lose), we head over to another mining operation, hot off the heels of the mining pool, [Poolin suspending withdrawals](/hive-167922/@chekohler/poolin-mining-pool-seems-to-be-running-on-empty) we are now getting news that another mining-related operation is calling for the bankruptcy court to save them.

Compute North, a data center provider, and cryptocurrency miner has filed for chapter 11 bankruptcy at a Texas court. The company cites a double squeeze that is the rise in energy costs and the crypto market’s prolonged slump continues, putting pressure on their ability to operate and meet obligations.

The Minnesota-based company will continue to operate, so it's not a be-all-end-all, but they are looking to get some pressure off them by working out payments to repay creditors. 

In the filing for bankruptcy, Computer North stated that it owed as much as $500 million to at least 200 creditors. Compute North estimated its assets are worth between $100 million and $500 million, according to the documents which is a pretty wide range and even at the high end it's not likely to be able to compensate creditors if it's chopped up and sold.

![computenorthbankrupt.png](https://images.hive.blog/DQmRRjB3tVrCQZ3i611QgCwykFwqnfupSEajEGpgSxpsocP/compute-north-bankrupt.png)

## Making bank and then breaking the bank

The company started out as a crypto mining operation in 2017 and was clearly successful in a small operation before pivoting to provide hosting services for other mining firms to leverage up their infrastructure. That is the risk you take when you move into a physical infrastructure, you have massive sunk cost and hope that you can reach a point of critical mass or you reach a point where you can bring down your burn rate and start servicing that debt.

It looks like Compute North went for critical mass, trying to get as big as possible in this bull run, and not considering how hectic the down trend would be, I think this is a cycle that's doomed to repeat come the next halving too. People are always going to get overconfident and think they've done the math only focusing on recent history.

https://twitter.com/compass_mining/status/1573083950234451974

## Even big boys get FOMO

To give you an idea of how bullish they were on their business model, Compute North had raised $385 million in equity and debt financing in February and has numerous deals with crypto miners including Hive Blockchain and Atlas Mining. 

And that's the beauty of mining, if you miscalculate you have to liquidate, no one is too big to fail in the mining industry, and it's why I am still so bullish on home mining and guerilla mining. 

When we see big boys go down, that hash power is removed from the network, and yours gets priced up and you can compete for more of the pie.

## Time to get lean

Compute North will have to restructure their debt and figure out a way to eat into it over time with the infrastructure they have going. It won't be easy with higher energy cost and higher interest rates so they are really up against it to make this work. This also puts pressure on them to dump the bitcoin they mine, meaning that those of us DCA'ers get to catch their forced selling and pick up cheap sats.

That's what I love about the bitcoin network, there is no favours or free lunches, if you make a mistake, you have to pay for it in full.

**Sources:**

- [coindesk.com](https://www.coindesk.com/business/2022/02/09/crypto-mining-data-center-provider-compute-north-raises-385m/)
- [coindesk.com](https://www.coindesk.com/business/2022/09/22/crypto-mining-data-center-provider-compute-north-files-for-bankruptcy-protection/)
- [decrypt.co](https://decrypt.co/110390/bitcoin-mining-data-center-firm-compute-north-files-for-bankruptcy)
- [bloomberg.com](https://www.bloomberg.com/news/articles/2022-09-22/crypto-mining-data-center-firm-compute-north-files-bankruptcy)

## Have your say

What do you good people of HIVE think? 

So have at it my Jessies! If you don't have something to comment, "I am a Jessie."

## Let's connect

If you liked this post, sprinkle it with an upvote or esteem and if you don't already, consider following me @chekohler  and subscribe to my [fanbase](https://hive.vote/dash.php?i=2&fan=chekohler)


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vote details (111)
@brianphobos ·
This series is hilariously worded. You Invest You Lose,  lol

You are right, even the big boys FOMO and get kicked in the teeth. 

It's crazy how these guys get the funding for stuff like this and don't bring people who have been through crypto bear markets. 
πŸ‘  
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@chekohler ·
$0.05
Dude it's nuts, if we just take a look at some of the guys who raised 100s of millions like these guys, Machinsky, Zac at blockFi and these crypto.com dudes and you look at their previous employment and experience you wonder htf this was even going to fly, I guess if you a good salesman and number been going up people just FOMO in

I honestly don't see this stopping, it's just going to sucker in bigger funds and investors each time, they will never learn
πŸ‘  
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@brianphobos ·
Well the unfortunate thing is I feel like when I need to raise money everyone just looks like me like I don't know what I'm talking about.  It is very strange.  Then these dudes raising 100s of millions and not really knowing much of anything about crypto.  It's very weird.   
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@goldgrifin007 ·
> And that's the beauty of mining, if you miscalculate you have to liquidate, no one is too big to fail in the mining industry, and it's why I am still so bullish on home mining and guerilla mining.

> When we see big boys go down, that hash power is removed from the network, and yours gets priced up and you can compete for more of the pie.

Dear @chekohler!
Is the business direction you are pursuing home mining and guerilla mining?😯
You are probably targeting a niche market!
πŸ‘  
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@chekohler ·
I plan to get into mining at some point yes, as soon as I can get affordable parts 
πŸ‘  
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@goldgrifin007 ·
Thank you for article!
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@joanstewart ·
$0.02
Over confidence in growth a very unhealthy prospect, Bitcoin has not been around long enough to give long stats to compare, economy worldwide is in flux jumping straight into mining on a large scale is asking to get your butt kicked.

Many of the 'big' mining operations into Bitcoin were scams during 2016-2018, good salesmen selling snake oil at street corner.

What I did enjoy during early stages one could download software and mine blocks directly. Did not earn much compared to large rig operations, just an extra little running on the sideline _good learning_, then electricity charges went up it became null and void.

πŸ‘  ,
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@chekohler ·
Absolutely, but everyone who gets in sees gold and thinks they can outcompete the market if you throw enough money at it, the bitcoin game is about finding your size, I still think its worth mining, especially if you're generating your own electricity like solar
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@joanstewart ·
Small rig with your own electricity generated would be a good way to run mining rig. 

Don't have to throw a lot of money into a self build little rig with parts available that can run day and night. Sounds like you have a plan, wishing you all the best, a great way to help keep crypto running in a different way.
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@kerrislravenhill ·
RE: Mining Business Compute North Goes Bust
https://media.giphy.com/media/3oriO5t2QB4IPKgxHi/giphy.gif

Posted Using [LeoFinance <sup>Beta</sup>](https://leofinance.io/@kerrislravenhill/re-chekohler-5kstpu)
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@chekohler ·
Lol but it sure is entertaining, this is the state of job creation now a days
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