Bitcoin infrastructure provider Blockstream has introduced the Blockstream Mining Note 2 (BMN2), the latest addition to its series of hashrate-backed security tokens. BMN2 is designed to cater to the growing interest in Bitcoin mining investments, providing qualified investors with a way to gain exposure to Bitcoin mining without the complexities of direct participation.
BMN2 follows the Blockstream Mining Note 1 (BMN1), which was launched in 2021 and achieved a 32% Bitcoin return over its 3-year term. As with BMN1, the new token complies with European Union regulations and is available to non-U.S. qualified investors through STOKR, a Luxembourg-based digital asset investment platform, Blockstream said in a statement.
Arnab Naskar, Co-founder and Co-CEO of STOKR, described BMN1’s results as “the highest payout in real-world asset (RWA) security token history.”
Our Blockstream Mining Note 2 ($BMN2) security token offering is BACK AT A DISCOUNT, priced to outperform direct $BTC investments. More ⬇️
⛏️ BMN2 = 1 PH/s = $21.23 hash price = $31,000 PH
⛏️ Designed to replicate BMN1’s successful 32% $BTC return
⛏️ Built-in safeguard of 50%…
— Blockstream (@Blockstream) September 5, 2024
Investment Opportunity in Bitcoin Mining
BMN2 offers several features designed to distinguish it from other Bitcoin mining-related investment products, such as hashrate contracts and hosted mining services. It includes perks like secondary market liquidity, fixed long-term rates, and immediate access to Bitcoin hashrate. The security token is backed by Blockstream’s mining facilities in North America, which operate at a competitive hosting rate of less than $0.045 per kilowatt-hour (kWh), below the industry average.
Each BMN2 token represents Bitcoin produced by 1 PH/s of mining hashrate, the computational power used to validate Bitcoin transactions and support the network. The token is offered at a discounted hashprice of $21.23 over a 48-month term, providing an alternative to purchasing Bitcoin directly on the spot market.
Hashprice, a standardized metric for the market value of hashrate, was over $40 on the spot market as of September 5, according to data from hashrateindex.com.
Risk Mitigation Measures
BMN2 incorporates several safeguards designed to address potential risks associated with Bitcoin mining, Blockstream said. For instance, 50% of the stated hashrate is held in reserve to mitigate issues such as equipment failure or reduced mining efficiency, aiming to provide a consistent Bitcoin output throughout the token’s term.
Chris Cook, Chief Information Officer at Blockstream, emphasized the company’s commitment to operational excellence, stating, “We know first-hand the complexities involved in mining Bitcoin—hardware challenges, energy curtailment, and price fluctuation. We created the BMN product to deliver a consistent hashrate with the goal of maintaining a strong and steady investment outcome.”
Focus on Sustainable Energy
According to the firm, Blockstream’s mining operations supporting BMN2 use over 80% carbon-neutral energy sources, such as wind, solar, and nuclear power. This aligns with the broader trend of seeking environmentally responsible Bitcoin mining solutions. The use of renewable energy sources also contributes to the decentralization and security of the Bitcoin network while offering an investment option for those prioritizing sustainability.