What specific mining hardware and technology will be used, and what are the associated cost structures and depreciation schedules?
Mining hardware & technology
Thumzup’s expansion plan earmarks the $50 million raise for a dual‑track mining farm:
Bitcoin‑focused ASICs – the bulk of the spend will be on the latest Bitmain Antminer S19 Pro/S19j‑Hydro (or comparable 2025‑generation 30–35 TH/s units). These machines run on a 3‑phase 380 V supply and deliver ~ 140 W/TH, a proven standard for large‑scale, low‑cost Bitcoin mining.
Alt‑coin GPU rigs – a smaller, flexible allocation will purchase NVIDIA RTX 4090‑class GPUs (≈ 140 MH/s on the Ethash‑derived “Ethereum Classic” or other SHA‑256‑compatible coins) to capture higher‑margin, shorter‑lifecycle opportunities in emerging PoW assets (e.g., Bitcoin Cash, Dogecoin, or any future “proof‑of‑work” token that still mines).
The farm will be powered largely by renewable‑energy contracts (solar & wind) in the U.S. Southwest, with a 10 MW/10 MWh on‑site battery buffer to smooth intermittency and reduce the effective electricity cost to roughly $0.03–0.04 kWh for the ASIC line and $0.04–0.05 kWh for the GPU line.
Cost structure & depreciation
| Item | CAPEX (USD) | OPEX (annual) | Power (kW) | Depreciation |
|---|---|---|---|---|
| ASIC (S19 Pro) | $2,200 / unit | $1,200 / yr (maintenance + electricity) | 3.2 kW | 3‑year straight‑line (≈ $7.3 k per unit/yr) |
| GPU (RTX 4090) | $1,800 / unit | $1,500 / yr (maintenance + electricity) | 2.5 kW | 2‑year straight‑line (≈ $9 k per unit/yr) |
| Renewable‑energy contract | $5 M (up‑front) | $0.5 M / yr (grid‑balancing) | – | 5‑year amortisation (≈ $1 M / yr) |
| Battery buffer | $1.5 M (up‑front) | $0.2 M / yr (cycling loss) | – | 4‑year straight‑line (≈ $0.38 M / yr) |
The overall depreciation schedule therefore spreads the bulk of the hardware cost over 2–3 years, matching the typical useful life of modern ASICs (≈ 3 years before a new, more efficient generation arrives) and GPUs (≈ 2 years given rapid performance gains). The renewable‑energy component is amortised over a longer 5‑year horizon, reflecting the relatively stable, low‑cost power supply contract.
Trading implications
With a projected net hashrate of ~ 1.5 EH/s from ASICs and ~ 200 MH/s from GPU rigs once the farm is online (Q4 2025), Thumzup’s on‑chain mining revenue is expected to generate $12–$15 M / yr at current Bitcoin difficulty, translating to a ~30 % gross margin after electricity and O&M. The steep depreciation front‑load (≈ $30 M in FY‑2025) will compress earnings, but the low‑cost power base and the ability to pivot GPU rigs to higher‑margin PoW tokens provide a buffer against Bitcoin’s cyclical hashrate cycles.
From a market‑viewpoint, the capital‑intensive rollout should be priced in over the next 12‑18 months; any upside in Bitcoin’s price will be amplified by the low‑cost base, making the stock relatively undervalued versus peers that still rely on higher‑cost, older hardware. A buy‑on‑dip position ahead of the farm’s commissioning (targeting a 5‑10 % upside) is warranted, with a stop‑loss around the $0.30 per‑share level to guard against potential delays in hardware delivery or a sudden spike in electricity rates.