Stockholm IT Ventures and Evolution Global to Setup 10,000 Petahash of Bitcoin Mining
Stockholm IT Ventures Signs MOU With Evolution Global to Deploy 10,000 Petahash of Bitcoin Mining
Stockholm IT Ventures has announced that it has entered into a strategic partnership with Evolution Global AS, a developer of innovative solutions for crypto mining after both parties signed a binding Memorandum of Understanding, MOU, to acquire an option to purchase up to 10,000 Petahash of Bitcoin mining capacity to be mined by Evolution Global.
The partnership is set to give birth to the incorporation of a new company, Cryptoplants AB, as both parties have agreed to source funding for chip development. Already, a test of the new application-specific integrated circuit (ASIC) chip is however currently being developed by Evolution Global. The chip is expected to outperform all Bitcoin mining ASICs and mining equipment in terms of costs and could deliver a huge share of the remaining Bitcoins available to be mined.
Stockholm IT Ventures said it will hold a 45% equity stake in the new venture as they expect external funding inflow relieving Stockholm IT of financial undertakings.
There are signs that Evolution Global will succeed with the chip as findings from by an independent consultant has given the project the nod.
Upon success of the project, Stockholm IT and holders of the Bytemine token that is currently in an ICO process can purchase capacity from Evolution Global at a low cost.
Cryptoplants has an option (“Option”) for an option price payment to Evolution Global of up to €6,000,000 in installments over an approximate five-month period to acquire up to 10,000 Petahash for an agreed discounted purchase price of €120/Terrahash, over a period of up to three years, or in some instances a longer period.
The effective all-in price of the PH is approximately 20% to 25% of the all-in price typically available from Bitcoin cloud mining contracts. At current market prices for Petahash, current conversion rates for Petahash into Bitcoin and current prices for Bitcoin, the Option potentially may generate a pre-tax profit for Cryptoplants in excess of €1,000,000,000.
The actual profitability could be materially less and will depend on the performance of the new ASIC, trends in pricing for Petahash and Bitcoins, the number of Petahash required to generate Bitcoins and the timing and methods used to finance and monetize the Option. In addition, it is likely that Cryptoplants will sell equity and or incur debt to fund a portion of the purchase price of the Option.
Stockholm IT Ventures CEO Anthony Norman said after Stockholm IT initiated the Cryptotech project in early 2018 which was later put on hold, they have taken a very careful stance toward the mining chip development segment given the market conditions. He said they have however followed the development lead by Erik Solberg closely and believe that if successful, this should provide them with a huge upside. This deal allows them to pursue the opportunity without financial exposure to Stockholm IT. Having seen the latest results and the due diligence we are strong believers in the ability of Evolution Global to succeed.
On their part, Evolution Global CEO Erik Solberg said after engaging a new chip development team earlier this spring, their progress has been very successful, and have had a lot of interest from potential large customers all around the world. However, Stockholm IT presented an offer that is a win-win situation for both companies.