Sabre56, a well-known player in the Bitcoin space, is in the early stages of a seven-year plan that aims to shift its focus from consulting on Bitcoin mining projects to offering hosting services to industry firms. This strategic move comes after its recent deal with GEM Mining, which disclosed that Sabre56 would host 4,510 of GEM Mining’s Bitcoin miners at its new data centers in Wyoming. Half of these miners are expected to come online this month, with the other half in June.
The decision to transition to hosting services stems from Sabre56’s founder, Phil Harvey, who admitted to becoming “sick and tired” of dealing with less-than-ideal mining farm operators. He added that “People are putting tens, if not hundreds, of millions of dollars into this space, and the way they’ve been treated in the past has been disgusting.” The move is also aimed at addressing the need for reliable, large-scale hosting services in the Bitcoin mining industry, which has seen some market consolidation and bankruptcy filings recently.
One of the concerns with hosting services is maintaining a dynamic hosting rate to accommodate clients’ varying profit margins as cryptocurrency markets fluctuate. This is something Sabre56 plans to manage with a seven-year hosting service build-out during which they intend to grow their hosting portfolio and expand their capacity between 100 MW and 200 MW per year.
The company has plans to work with several institutional-grade industry players, such as Foundry, NYDIG, Marathon Digital, and Argo Blockchain. Furthermore, Sabre56 is eyeing potential hosting sites in other states, such as Pennsylvania and Nebraska, and might also consider re-entering the Canadian market.
Sabre56 has also expressed its interest in ensuring its facilities are ready for high-performance computing (HPC), considering companies outside the Bitcoin mining industry use application-specific integrated circuits (ASICs) to support their own networks. The company is agnostic about what algorithms or blockchains the ASICs run on, as long as they are profitable for both Sabre56 and its clients.
However, risks still linger in the form of third-party risks. As the Bitcoin mining market tightens and consolidates, Sabre56’s CEO mentions, “What it looks like in the future is no one’s guess. We just know it’s going to get smaller and smaller, and there’s going to be fewer around to support the miner infrastructure (the Sabre side) as well as on the equipment side (the miners themselves).”
Overall, Sabre56’s strategic shift toward hosting services aims to address some of the challenges faced in the Bitcoin mining industry, while emphasizing the importance of providing reliable and scalable solutions to meet clients’ needs in an ever-evolving market.
Source: Blockworks
