Merkle Standard prepares to move crypto mining operations from Usk, WA, to new sites in Tennessee, Oregon

Merkle Standard, the front office LLC for the joint venture bitcoin mining operation by Beijing's Vladimir's and Vladimir's Allrise Capital, is preparing to move most of its Bitcoin mining operations from its current facility in Usk, WA, to new sites in Memphis, Tennessee, and Christmas Valley, Oregon. 

Merkle is currently completing the installation of a number of Bitmain's "Ant Boxes"-- 40ft shipping containers each modified to house around 200 highly specialized bitcoin-mining computers. Once the electrical installation of the Ant Boxes is completed, Merkle will likely begin moving thousands of its computers from Usk to Memphis. There are over four dozen 20ft shipping containers and several 40ft shipping trailers parked at the former PNC paper mill site waiting to be loaded and shipped. 

The Memphis location can support up to 45 megawatts of mining operations, or about 75% of the 60 megawatts  Merkle has been contracting for over the last year. The joint venture used up to a maximum of 78 megawatts at its operational peak in late Spring 2023, but many of its computers have become obsolete and can no longer earn more in bitcoin than the cost of the electricity to run them. According to local news reports, Merkle's five-year power contract with Memphis Light, Gas & Water went into effect August 1.  Bitcoin mines coming to Memphis and Tennessee (wuot.org) 

The crypto mining operation in Usk has been a financial disaster for Allirse, Bitmain, and the Chinese miner Bitfufu which also operated bitcoin mining computers in Usk. Last August, Merkle Standard CEO Steve Wood told Pend Oreille PUD that they would need to reconsider their operations. A few months later they purchased the new locations with access to cheaper electricity in Memphis and Christmas Valley. In a press release printed in the Newport Miner last February, Merkle Standard announced that they would be moving most of their bitcoin mining operations to other locations. At the same time, they told the PUD they planned on only keeping 26 megawatts of their river-water-cooled machines. The rest of their computers are air-cooled.

The water-cooled machines are difficult to relocate because they require a massive supply of fresh water to operate.  However, it is not clear if Merkle will be able to continue to operate their water-cooled machines in Usk because that model of machine is nearly obsolete and requires power rates lower than 6.5 cents per kw/h jsut to break even on their power bill under current conditions. Merkle's plan was based on the assumption that they would receive 26 MW of federally subsidized power from the Bonneville Power Administration in the winter of 2024-2025-- power that is much cheaper than what Pend Oreille County residents pay for their power. However, the BPA has been reducing the amount of subsidized power it provides to Pend Oreille County, and the Chinese-sponsored joint venture might not get the amount of power it was planning on last February.