HIVE Blockchain Launches Sweden Ethereum Mining Facility as Industry Scales Up Amid Market Turmoil

While cryptocurrency markets faced intense selling pressure on January 15, 2018, the infrastructure underpinning the blockchain ecosystem continued its rapid expansion. HIVE Blockchain Technologies, a publicly traded cryptocurrency mining company listed on the TSX Venture Exchange, officially commenced Ethereum mining operations at its new facility in Boden, Sweden, marking a significant milestone in the industrialization of digital currency mining.

TL;DR

• HIVE Blockchain launched Phase 1 of its Swedish Ethereum mining operation on January 15, 2018
• The facility increased the company’s mining energy consumption by over 175% to 10.6 megawatts
• HIVE planned to add 13.6MW of GPU capacity by April and 20MW of ASIC Bitcoin mining by September 2018
• The Sweden facility uses custom Genesis-designed A2 mining rigs, more efficient than prior generations
• HIVE raised over C$200 million since September 2017, retaining C$55 million in working capital

Sweden Phase 1: A Strategic Expansion

HIVE’s new Swedish facility represents the company’s most ambitious mining project to date. The Phase 1 operation, located in Boden—a town in northern Sweden known for its cold climate and access to abundant hydroelectric power—began mining Ethereum on January 15, 2018. The region’s naturally low temperatures provide an inherent advantage for mining operations, reducing the cooling costs that represent a significant portion of operational expenses.

The Phase 1 launch increased HIVE’s total energy consumption dedicated to cryptocurrency mining by more than 175%, bringing it to 10.6 megawatts. For context, that level of power consumption is roughly equivalent to powering a small town, reflecting the enormous energy requirements of industrial-scale cryptocurrency mining.

The Genesis Partnership

The Sweden facility was the first mining operation jointly constructed by HIVE and Genesis Mining Ltd., the world’s largest digital currency mining hashpower provider. The collaboration leveraged Genesis’s years of operational experience, with more than twenty Genesis personnel dedicated to HIVE’s multi-phase Sweden expansion.

The facility utilizes custom Genesis-designed A2 mining rigs that the company describes as more efficient than prior generations. This focus on hardware efficiency is critical in the mining industry, where profit margins depend heavily on the ratio of computational output to energy consumption. The rigs are capable of mining Ethereum and other GPU-based digital currencies, including Ethereum Classic, ZCash, and Monero.

“HIVE and Genesis are building the backbone infrastructure for the blockchain sector,” said Marco Streng, Co-Founder and CEO of Genesis Group. The partnership between a publicly traded company and the world’s largest mining operator signaled a maturing industry moving from hobbyist operations to institutional-grade infrastructure.

Aggressive Growth Plans

HIVE’s ambitions extended well beyond Phase 1. The company outlined plans to add an additional 13.6 megawatts of GPU mining capacity in Sweden by April 2018, which would more than double the initial deployment. Furthermore, HIVE intended to bring online 20 megawatts of ASIC mining capacity by September 2018, specifically targeting Bitcoin and Bitcoin Cash mining.

The aggressive expansion timeline was backed by substantial capital. HIVE had raised over C$200 million since September 2017, when it first acquired a large-scale mining facility in Iceland. After financing all planned expansions, the company expected to retain approximately C$55 million in working capital, providing flexibility for future growth opportunities.

Mining Economics in a Volatile Market

The timing of HIVE’s expansion was noteworthy, coming at a moment when cryptocurrency prices were experiencing significant volatility. Bitcoin had fallen to approximately $13,820 on the day of the facility launch, down from near $20,000 in December 2017. Ethereum, however, had surged over 400% since HIVE began mining in September 2017, trading at approximately $1,292.

For mining operations, the relationship between cryptocurrency prices and operational costs is the fundamental equation driving profitability. With Bitcoin’s total supply approaching 16.8 million coins—approximately 80% of the eventual 21 million cap—the mining industry was acutely aware that the remaining rewards would become increasingly difficult to extract, making efficient operations more critical than ever.

HIVE’s strategy of diversifying across multiple cryptocurrencies and geographic locations—Iceland and Sweden—reflected a sophisticated approach to managing the risks inherent in the mining business. Access to renewable energy in both locations also addressed growing concerns about the environmental impact of cryptocurrency mining, a topic that was drawing increasing scrutiny from policymakers and environmental advocates.

Why This Matters

HIVE Blockchain’s Swedish launch on January 15, 2018, represented more than just a corporate milestone—it was evidence of the professionalization and scaling of the cryptocurrency mining industry. Even as market prices experienced significant corrections driven by regulatory fears, companies like HIVE were making long-term investments in mining infrastructure, signaling confidence in the enduring value of blockchain networks. The expansion also highlighted the geographic and economic dynamics shaping the mining industry, with cold-climate regions offering abundant renewable energy becoming the preferred locations for industrial-scale operations. As debates about Bitcoin’s energy consumption intensified, the industry’s pivot toward green energy sources in Scandinavia offered a potential answer to one of cryptocurrency’s most persistent criticisms.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk. Always conduct your own research before making investment decisions.