On Thursday Bitcoin Bitcoin
-0.27%
Infrastructure developer Blockstream has launched its third series of security tokens, Blockstream Mining Note 2 (BMN2).
BMN2 is a security token compliant with EU regulations. Available to qualified non-US investors. Provides exposure to the Bitcoin hash rate operated by the Company’s North American enterprise-grade mining facility, provided in partnership with a virtual asset service provider based in Luxembourg. Stalker.
The company claimed in a statement shared with The Block that the launch was driven by growing investor interest in the mining industry.
Each BMN2 security token entitles holders to one bitcoin mined at Blockstream’s mining hash rate of 1 PH/s (peta hashes per second). The company said the token is designed to provide investors with an on-ramp to strategically participate in the market ahead of the next bitcoin halving.
The token aims to replicate the success of Blockstream’s first iteration of mining notes (BMN1), which launched in 2021 and matured in July 2024. The token delivered a 32% Bitcoin yield over a three-year period, which Arnab Naskar, STOKR’s co-founder and co-CEO, describes as “the highest yield in the history of real-world asset security tokens.”
The Bitcoin industry has matured since 2021, and mining-related investment products such as hash rate contracts and hosted mining contracts are widely available to investors, but Blockstream argues that these products lack the secondary market liquidity, long-term fixed interest rates, immediate exposure, and market timing protection that BMN2 can provide.
“We know firsthand the complexities involved in Bitcoin mining: hardware issues, energy savings, price fluctuations, etc. We built our BMN product to provide consistent hash rates with the goal of maintaining strong and consistent investment performance,” said Blockstream CIO Chris Cook.
Below market hash price
BMN2 has raised nearly $7 million since its primary offering began in July, the company claims, offering an investment opportunity to outperform Bitcoin purchases on the spot market.
It also includes safeguards such as setting aside 50% of the stated hash rate to protect against potential mining failures, efficiency drops, and other issues.
Hash price is a term coined by Luxor, a Bitcoin mining service company. It refers to the expected value of 1 PH/s of hashing power per day. This metric quantifies how much profit a miner can expect to make from a certain amount of hash rate.
The BMN2 Series 3 offers a hash rate of $21.23 for 48 months, which equates to a fixed cost of $31,000 PH/s. According to The Block’s data dashboard, this is significantly lower than the current market hash rate of around $0.041 TH/s/day ($41 PH/s/day).
The company claims that BMN2’s Bitcoin mining operation began this week and operates at equivalent hosting rates of less than $0.045 per kWh, compared to an industry average of $0.065 for businesses and $0.075 for retail customers, adding that 80% of the electricity used in its operations comes from carbon-neutral sources.
Blockstream CEO and co-founder Dr. Adam Back invented the HashCash algorithm, which is the basis for the proof-of-work protocol that is a fundamental component of Bitcoin’s security architecture.
Disclaimer: The Block is an independent media outlet providing news, research and data. As of November 2023, Foresight Ventures is the largest investor in The Block. Foresight Ventures invests in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is an anchor LP of Foresight Ventures. The Block continues to operate independently to provide objective, influential and timely information on the cryptocurrency industry. Current financial disclosures are as follows:
© 2024 The Block. All rights reserved. This article is provided for informational purposes only. It is not provided or intended to be legal, tax, investment, financial or other advice.