Although this company also changed its name and business focus only recently, its unique nature of business has us rooting for it. The company in question is the Vancouver, Canada-based HIVE Blockchain Technologies Ltd (CVE:HIVE; OTCMKTS:HVBTF). It is a cryptocurrency miner that mines notable cryptocurrencies including Bitcoin, Ethereum, Litecoin, Ethereum Classic, Dash, ZCash, and Monero.
In case you are unfamiliar with crypto mining, it simply involves solving complex equations of the computer code on which cryptocurrencies are built. By solving these equations, the miner is able to unlock rewards or crypto-coins.
Consider it to be the equivalent of gold mining. It’s no coincidence that HIVE was a gold miner prior to changing its business course.
But like gold mining, cryptocurrency mining is a capital-intensive business. Mining consumes a lot of energy and requires expensive, heavy-duty rigs. Electricity and computer hardware make up for the two most significant costs in cryptocurrency mining, which is why individuals and small mom-and-pop miners cannot make the most of this rewarding activity.
HIVE Blockchain Technologies, on the contrary, capitalizes on economies of scale. The company has a ginormous mining setup in Iceland where electricity costs are cheap and temperatures are cool, automatically preventing the hardware from going up in smoke while it runs tirelessly 24/7.
What particularly piques our interest in HIVE is the fact that it is majority owned by the largest cryptocurrency miner in the world—Genesis Mining Ltd. Because of this reason, HIVE gets access to Genesis’ mining resources, including its data centers, its mining expertise, and its experienced team.
This strategic relationship with Genesis has recently helped the company raise over $200.0 million in funding for its expansion initiatives. Part of these expansion plans are already being materialized.
Just two weeks ago, HIVE has announced the completion of the first phase of a mining complex in Sweden. Again, the geography matters. Sweden has cheap and abundant green energy and cold climate—both of which create a conducive environment for mining.
Long story short, HIVE is now at the forefront of the mining industry, growing by leaps and bounds. The company is a vital intermediary in the cryptocurrency space whose contribution to a cryptocurrency’s growth mustn’t be undermined. As long as demand for cryptocurrencies will continue to flourish, the need for mining will likewise grow.
Analyst Take
Investing in blockchain penny stocks can be a very risky wager unless you know the company inside out. There are far too many loss-making sneaky businesses out there beguiling gullible investors by using buzzwords like “blockchain.”
HIVE Blockchain Technologies is one company that has proven its worth in the game. Its relationship with Genesis Mining affords it further legitimacy. This is one company investors should be watching right now because HIVE could turn out to be the best blockchain technology penny stock in 2018
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