Cryptocurrency Mining Provider GigaWatt Faces Millions of Dollars in Debt
GigaWatt, one of Central Washington’s largest companies in the cryptocurrency sector is, unfortunately, facing millions of dollars in debt as cryptocurrency prices fall. According to the Oregonian Times, Giga-Watt’s once upward trajectory is facing a sharp decline as the company explores every legitimate stream of revenue to remain in business.
Giga-Watt Lays off 80 Percent of Staff and Suspends Construction
In 2017, GigaWatt was performing exceptionally well. With international investors keen to join the booming industry, GigaWatt grew to 62 employees and raised tens of millions of dollars in capital. The idea was to transform 24 prefabricated buildings into a cryptocurrency mining hub to yield digital tokens like Bitcoin.
Unfortunately, the project is now facing approximately $5 million in debt and had to lay off 80 percent of staff and suspend all construction. The founder Dave Carlson also stepped down from the company in August 2018. George Turner will be running GigaWatt until the company appoints a new CEO.
The cryptocurrency mining company is also facing many investor lawsuits due to their initial coin offering (ICO). The ICO raised $22.6 million in Bitcoin, Ethereum, and other cryptocurrencies in exchange for the company’s tokens. The Giga Watt tokens, in theory, gave investors hosting services for cryptocurrency mining computers at a discounted price.
GigaWatt, however, used the funds from the ICO to finance the construction of the mining pods. Due to delays in construction, the investors have seen very little return from their original investment.
Turning to Other Revenue Streams to Stay Afloat
While GigaWatt faces many issues, the Oregonian Times believes that it is a sizeable industry-wide issue. According to Coinmarketcap, Bitcoin fell from almost $20,000 in December 2017 to $6,517 as of October 22, 2018. The reduction in value has made it significantly difficult for companies like Giga Watt to raise additional capital and attract new clients.
With the high number of layoffs, lawsuits, and low cryptocurrency prices, the company has resorted to creative means to increase their revenue. The company is, however, running 900 computers to mine cryptocurrencies, which will generate approximately $60,000 and $80,000 per month.
“That by itself is not going to solve our problems,” said Turner. “But we’ve reached the point where we’re looking for every possible legitimate stream of revenue” that will “help us dig our way out of this.”