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Nasdaq-listed Marathon Patent Group announced Monday that it has purchased around 4,813 bitcoin for about $150 million in total.

The investment is part of the company’s treasury funds, Marathon CEO Merrick Okamoto told The Block. This is the first time the company, which itself is into bitcoin mining, has bought bitcoin from the market.

“By leveraging our cash on hand to invest in bitcoin now, we have transformed our potential to be a pure-play investment into a reality,” said Okamoto. “We also believe that holding part of our treasury reserves in bitcoin will be a better long-term strategy than holding U.S. dollars, similar to other forward-thinking companies like MicroStrategy.”

To be sure, Marathon’s stock rallied 892% last year and MicroStrategy’s stock gained 166%, as compared to bitcoin’s gain of about 300% in the year. 

Earlier this month, Marathon raised $250 million in an equity round. When asked whether those funds were utilized to buy the bitcoin, Okamoto told The Block that the company had $425 million in cash before this raise, which was utilized to buy the bitcoin.

Crypto financial services firm NYDIG helped execute the transaction. The purchase was completed on January 21, NYDIG told The Block, adding that the purchase amount per bitcoin was around $31,135.

The order was completed “in only a few hours” from idea to execution, NYDIG told The Block. Last month, the firm also assisted insurance giant MassMutual to buy bitcoin worth $100 million, and MassMutual at the time acquired a $5 million minority equity stake in NYDIG.

As for Marathon Patent Group, the company has been mining bitcoin since late 2017.  Today, it has 2,560 bitcoin miners in production, currently producing around 1.5 to 2 bitcoin per day, Okamoto told The Block.

To expand its operations, Marathon recently ordered 100,500 units of advanced S19 miners from Bitmain for about $270 million. “These units will be shipped beginning this week,” Okamoto told The Block. “When fully deployed and installed, the company’s total hashrate capability will exceed 10.34 exahash, which we believe could make Marathon the largest bitcoin miner in the world.”

In terms of bitcoins, that hashrate would help produce around 55-60 bitcoin per day, said Okamoto.

Marathon believes that it is uniquely positioned for long-term success since it recently formed a joint venture with Beowulf Energy to provide cheap electricity to its bitcoin mining facilities.

“Most bitcoin miners use a hosting model for their operations. […] The typical cost for this hosting arrangement is in the $0.05 to $0.06 Per kWh range,” Okamoto told The Block. The partnership with Beowulf, on the other hand, will help Marathon lower the cost to $0.028 per kWh, said Okamoto, adding that it will also lower the cost to mine each bitcoin from over $7,700 to approximately $4,400.

The price of one bitcoin is currently around $33,500, according to The Block’s data dashboard. When asked if Marathon will further invest in bitcoin, Okamoto said, ” to be determined.”

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Ethereum studio ConsenSys has announced it will integrate Quorum into the China state-sanctioned Blockchain-based Service Network (BSN).

ConsenSys said that Quorum, which it acquired from JPMorgan last year, will be the latest open-source enterprise blockchain that is becoming compatible with the BSN. The goal is to make ConsenSys’ Codefi applications available on the BSN marketplace for developers to build Ethereum-based enterprise solutions, according to the announcement.

Formally rolled out in April, the BSN is a service infrastructure that allows developers to build decentralized applications on top of both public and permissioned blockchains that it supports, like Hyperledger Fabric, Ethereum, and Polkadot, among others. 

The initiative is backed by the State Information Center of China, a think tank under the country’s cabinet-level economic planning agency, the National Development and Reform Commission. Beijing-based Red Date Technology oversees the operations and development of the platform.  

By setting up cloud computing resources in advance, the BSN touts an ambition to reduce the costs and entry threshold for dApp development. 

As for Quorum, it will be configured to GoQuorum so that it will be “interoperable with other permissioned frameworks on BSN,” said Yifan He, CEO of Red Date and an executive director of the BSN Development Association.

“After the launch, BSN will include Quorum in BSN’s training programs in 2021 to substantially accelerate the enterprise adoption of blockchain technology and Ethereum-based solutions in China,” he said.

ConsenSys founder Joseph Lubin said, “We believe that the different open-source blockchain protocols need to interoperate, and with the BSN we are taking a significant step forward in bringing ConsenSys Quorum to many enterprises in China that could benefit from transparent collaborative business networks.”

According to Monday’s announcement, BSN has deployed over 2,000 blockchain applications among companies and government organizations in China since the launch last year.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Quick Take

• Kenetic Capital is a Hong Kong-based blockchain-focused investment firm and proprietary trading shop founded in 2016
• Over the last year and more recently, Kenetic has primarily focused on providing investment to Asia, enterprise/institutional, and equity-related deals
• The Block has mapped out 104 startups and protocols across 15 verticals, which are part of Kenetic Capital’s active portfolio

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Quick Take

• Ethereum is governed via a process where developers, miners, and community members try to reach a consensus on new upgrades
• Ethereum’s next hard fork “Berlin” will introduce new transaction formats, as well as optimizations to the gas costs of certain functions
• The most anticipated upgrade in a while, EIP-1559 which will significantly change Ethereum’s economic model, will likely be introduced during Q3 of 2021

This research piece is available to
members of The Block Genesis.
You can continue reading
this Genesis research on The Block.