Compass Mining held a Question & Answer session Thursday, November 3 on the current deployment status of Texas 3. We thank all our clients for attending and their follow up questions.
Below is a copy of common questions and responses from our team.
What is the expected ETA for Texas 3 based on the current information?
All parties involved in the Wolf Hollow/Texas 3 location expect the site to go online immediately following approval from the Energy Reliability Council of Texas (ERCOT). The site's infrastructure and final build-out has been completed, including all further circuitry work.
What units are online? How were units picked to go online?
Units went online based on chronological order, beginning with a prior site transfer from Oklahoma 2. After that, the most delayed units went on next. We plan on continuing with the same operating practice.
As of now, 2,000 of Compass Mining's 24,000+ unit deployment are online. While awaiting ERCOT approval,the work for further circuits has been complete, including for other containers and networking. Once the full ramp-up approval is finalized, we do expect the vast majority of remaining units to go online. Presently, 18,000 units are on racks and installed and ready for energy. Please note that units take time to configure on a miner-by-miner basis after energization.
Why is Texas 3 delayed? Why did Compass Mining not communicate the delays correctly based on today's timelines?
Texas 3 was delayed due to constraints on the Texas energy grid. The grid is overseen by the ERCOT, an organization that manages the Texas grid.
Many Bitcoin miners have selected Texas for Bitcoin mining due to its low and flexible energy costs. However, that has led to excess demand on the grid and slower than expected online times for many Bitcoin mines in the region. The Wolf Hollow site is one of many delayed Bitcoin mining facilities in Texas.
Compass Mining's hosting partner has generally shared information from ERCOT, the site operator and other associated contractors, including with respect to anticipated delays. Compass Mining has always shared that information as fast as possible on further delays via its weekly facility updates or clients emails. Unfortunately, much of this the information we received about the grid maintenance schedule and ERCOT deployment process proved to be inaccurate based on the maintenance schedule and ERCOT deployment process.
Texas 3 was built and run by Compute North which is now in Chapter 11 bankruptcy. Why did Compass Mining work with this organization?
Compass Mining works with many third parties to provide hosting for Bitcoin mining. Compute North was one of the largest and most established hosting providers in the Bitcoin mining space, working with publicly traded firms and other large miners in the space. Compute North was considered an established hosting provider in the Bitcoin mining space.
Compass Mining signed the contract with Compute North in Q4 2021, far before any of Compute North's financial troubles were known or relevant. We were unaware of Compute North's financial troubles until they were publicly disclosed in connection with its bankruptcy filing.
Is Compute North still operating the Texas 3 site?
Compute North is being phased out as the site operator over the coming weeks. As of Tuesday, November 1, Compute North's largest secured creditor, Generate, now effectively owns the entire site, having purchased the Compute North entity that previously owned the site remaining part from Compute North.
Compute North will temporarily run the site as a new site operator until Generate transitions it to a new operator, already chosen by Generate, comes onto the site. Compass is aware of the site operator and has a great relationship with them already at a different site.
What are the current risks Compass Mining faces from Compute North's bankruptcy?
Fortunately, Compass Mining's exposure to Compute North's bankruptcy limited due to Generate’s acquisition of the site. We expect units to continue to go online as ERCOT approves the site's integration into the Texas grid, and we have an open line of communication with Generate pertaining to the site's launch.
What is Compass Mining doing to get machines online faster?
Compass Mining is working with the site operator, Generate and other third parties to get units online faster. Compass Mining has also begun engaging with subject matter experts directly to better understand how quickly we can get units online at Texas 3.
What is the detailed deployment schedule like for the remaining units?
The first wave of units was expected to be 24,000, of which 2,000 are now online. We expect 18,000 further units to go online once energization commences. Please be aware that networking and configuring that many units takes upwards of a week, even with a large staff.
Why did Compass Mining offer Antminer S19 XP orders to go online first at Texas 4, while other orders waited for Texas 3 to go online?
Compass Mining is offering multiple order types to go online at Texas 4, beginning with Antminer S19 XPs. Other order types will go online at Texas 4 based on order date and availability. Compass Mining will contact order types via email as spots become available.
Please note that only Antminer units are available to run at Texas 4 due to the site's infrastructure.
Photo by Matthew Henry on Unsplash
