Is Riot Blockchain Better Than Bitcoin's Digital Gold?
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The U.S. is now the largest bitcoin miner in the world, and Riot Blockchain (NASDAQ: RIOT) owns the largest bitcoin mining operation in North America. Is Riot a better investment than the bitcoin it mines? Possibly – but investors should prepare for volatility in the quest for crypto profits.
To produce new bitcoin, miners like Riot use powerful computers to solve increasingly difficult cryptographic problems called hashes, confirming transactions on the bitcoin blockchain. In exchange for that computing effort, known as hash power, the miners collect newly created bitcoin as a reward. More total hash power means faster, more secure transactions and bigger rewards. In addition to its mining efforts, Riot also hosts mining equipment for institutional clients and produces electrical equipment for bitcoin mining through its ESSMetron subsidiary.
Mining is Riot's most profitable venture, even with the current downturn in bitcoin prices. The company expects to see even greater success there as it continues growing. Mining accounted for 72.5% of revenue in Q1 2022 and generated roughly 97% of the $37.9 million in operating income. And while the hosting and engineering sectors appear to be growing more rapidly, that's because neither generated revenues in 2021.
Source Fool.com
