Stronghold Digital Mining, Inc. (SDIG) Q1 2023 Earnings Call Transcript


Good morning, and welcome to Stronghold Digital’s Mining Conference Call for the First Quarter ended March 31, 2023. My name is Catherine, and I’ll be your operator this morning.

Before this call, Stronghold issued its results for the first quarter of 2023 and a press release, which is available in the Investors section of the company’s website at You can find a link to the Investors section at the top of the home page.

Joining us on today’s call are Stronghold’s Chairman and CEO, Greg Beard; and CFO, Matt Smith. Following their remarks, we will open the call for questions.

Before we begin, Alex Kovtun from Gateway Group will make a brief introductory statement. Mr. Kovtun, please proceed.

Alex Kovtun

Thank you, operator. Good morning, everyone, and welcome. Today’s slide presentation, along with our earnings release and financial disclosures were posted to our website earlier today and can be accessed on our website at Some statements we’re making today may be considered forward-looking statements under securities law and involve a number of risks and uncertainties.

As a result, we caution you that there are a number of factors, many of which are beyond our control, which could cause actual results and events to differ materially from those described in the forward-looking statements. For more detailed risks, uncertainties and assumptions relating to our forward-looking statements, please see the disclosures in our earnings release and public filings made with the Securities and Exchange Commission. We disclaim any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law.

We will also discuss non-GAAP financial metrics and encourage you to read our disclosures and the reconciliation tables, the applicable GAAP measures in our earnings release carefully as you consider these metrics. We expect to file our quarterly report on Form 10-Q on May 15, 2023, with the Securities and Exchange Commission, which sets forth detailed disclosures and descriptions of our business as well as uncertainties and other variable circumstances, including, but not limited to, risks and uncertainties identified under the caption Risk Factors in our previously filed annual report on Form 10-K filed on April 3, 2023 and our to-be filed quarterly report on Form 10-Q. You may access Strong World’s Securities and Exchange Commission filings for free by visiting the SEC website at or Stronghold’s Investor Relations website at

I would like to remind everyone that this call is being recorded and will be made available for replay via a link available in the Investor Relations section of Stronghold’s website.

Now I would like to turn the call over to Stronghold’s Chairman and CEO, Greg Beard. Greg?

Greg Beard

Thank you. Good morning, everyone, and thank you for joining us on our first quarter 2023 earnings call.

For today’s call, we are going to reference an associated slide presentation that is available through the webcast and on the IR portion of our corporate website. While the first quarter of 2023 remained a challenging environment for our business and most public bitcoin mining companies, we continue to take proactive steps to execute on our strategic plan and best position Stronghold for long-term success.

Before turning the call over to our CFO, Matt Smith, for a detailed review of our financial results, I would like to touch on some recent highlights from our business and our confidence in the year ahead.

Let’s start on Slide 3. As a reminder to everyone call, Stronghold owns and operates two waste coal reclamation facilities in Pennsylvania, Scrubgrass and Panther Creek, both of which are low-cost, environmentally beneficial coal refuse power generation facilities.

Today, we have 165 megawatts of power generation capacity and current hash rate capacity of 2.8 exahash per second and expect to achieve 4 exahash by the end of Q3 2023 with our already built and ready to use slots at our data centers.

Moving to Slide 4. Stronghold today is significantly delevered versus where we were just nine months ago. We accomplished this delevering through five transactions or amendments with six counterparties. Our net debt is now just approximately $50 million.

We have no mandatory amortization payments until July 2024, and we have significantly reduced our outstanding payables. With those efforts behind us, we are very excited to focus on what we believe are accretive and capital-efficient growth initiatives and projects.

Since returning 26,000 miners representing 2.5 exahash to our lender in August 2022, we have received or procured approximately 22,000 miners representing 2.2x exahash, nearly refilling the capacity made available by the manner of turn.

We have done so while investing only $15 million of incremental capital. As announced last month, we recently acquired 5,000 MicroBT Watt Minor M50 miners or $15.50 per terahash. These are top-line machines, and we believe that the price is as attractive as we have seen in the market.

These matters are funded with proceeds from our April 2023 private placement in which I invested personally not only because I continue to have a strong faith in the company, but also because we found an exceptionally compelling and accretive opportunity. Recent power prices have been $20 to $35 per megawatt hour during the month of April and forward prices for the next 12 months currently average $40 to $45 per megawatt hour.

We expect that these M50 miners will generate revenue in excess of $110 per megawatt hour based on an $0.08 hash price with minimal incremental cash operating costs. This represents significant potential uplift to revenue and cash flow that allows us to recover our entire investment in less than one year based on an $0.08 hash price, current forward power prices and a 95% assumed minor uptime.

We also recently announced a 2-year capital-efficient Bitcoin mining agreement with leading minor manufacturer Canaan, where Stronghold will operate 4,000 miners by June 15, 2023, with total hash rate capacity of 400 petahash supplied by Canaan. Stronghold will receive 50% of the bitcoin mined and recover cost plus 10% on half the associated power. We retain all upside from selling power to the grid.

Half of the miners are currently on site and ready to be deployed. To reiterate, the fact that we can plug these M50 miners and Canaan miners into our ready-for-use data center slots immediately further highlights the benefits of owning our own power and data center resources that enables us to undertake these types of transactions without the incurrence of any significant expenses.

The MicroBT and Canaan transactions have accelerated our Bitcoin mining capabilities and growth. On our last earnings call, we raised our hash rate guidance before exahash and expected to be there by year-end. Following these recent announcements, we now anticipate that we will reach for 4 exahash by the end of the third quarter.

We are evaluating various opportunities that would exceed our current capacity. While we can make no assurances regarding future growth, we will continue to explore various opportunities to grow a hash rate in an accretive and capital-efficient manner.

Finally, when we talk about growth, we are primarily talking about cash flow growth, and that includes a diligent focus on expenses and operational efficiency. Consistent with our guidance, we achieved a net cost of power between $45 and $50 per megawatt hour in March, and we believe that certain tailwinds such as reduced fuel costs and personnel expenses to drive our costs lower for the rest of the year. We are now forecasting a net cost of power of $40 to $50 per megawatt hour on average for the rest of 2023.

As we discussed on our last earnings call, low power prices have created the opportunity to be more flexible with how we dispatch our power plant resources versus importing power from the grid. Looking forward, we plan to optimize the use of our power plants, which means that the plants would be expected to run at full capacity in the summer and winter, but idle during the shoulder months when we expect to be able to import power at a lower cost to stronghold.

Additionally, as we have disclosed, our plants generally require one to two maintenance outages per year. To that end, we will be taking a 2-week outage at and Panther Creek later this month. However, we are happy to report that Scrubgrass has already performed most of the maintenance work than an outage would have entailed and we do not currently expect to take a planned outage this spring as exahash.

Moving to Slide 5, which lays out our hash rate growth. We have been able to capitalize on some continued pockets of distress in the bitcoin mining space and are actively evaluating incremental opportunities to fill our limited remaining data center capacity. After turning minor to our lender in August 2022, we had a hash rate capacity of 1.4 exahash. At the end of Q1, we had 2.6 exahash. We are currently at 2.8 exahash.

We have contracted to receive miners to bring us to 3.8 exahash and believe that we will achieve 4 exahash by the end of Q3. Importantly, and I can’t emphasize this enough, we are focused on accretive capital efficient growth, and I think that the chart on the right illustrates this well. From inception to the first half of 2022, our CapEx divided by the hash rate contracted during the period was about $60 per terahash.

In the second half of 2022, it was $20 per terahash. And in 2023, year-to-date, it has been about $10 per terahash. We believe that these numbers demonstrate that we are getting more revenue potential per dollar spent than we ever had before, and we aim to prudently grow and deploy capital.

Let’s move to the next slide. As I mentioned earlier, we recently announced unique agreements with Foundry and Canaan. These are technically hosting agreements in name, but we do not believe that the word hosting does them justice because they were very different than industry standard hosting agreements. Similar standing hosting agreements, we do not have upfront CapEx, and we are being paid to operate Bitcoin miners.

However, a significant difference is that we have exposure to bitcoin mining economics as demonstrated in the chart on this page. We preserve power pricing upside in our relatively unique ability to curtail, which we believe is also differentiated.

We believe that these agreements are highly beneficial for Stronghold and demonstrate our ability to creatively increase hash rate without capital investment. Collectively, these agreements are expected to add hash rate capacity of over 0.8 exahash per second. Before turning it over to Matt, I want to thank our Co-Founder and former Co-Chairman, Bill Spence, for his vision, service and leadership.

Bill recently announced his retirement to spend time with his family and focus on his health, but he will continue to consult with us, focusing primarily on supporting our efforts related to environmental reclamation, beneficial use ash and carbon sequestration, areas of key focus for the company.

With that, I’d like to pass it over to our CFO, Matt Smith.

Matt Smith

Thanks, Greg.

I’m going to start on Slide 7 with a quick recap of our deleveraging since last summer. In summation, Stronghold has reduced total debt plus net current liabilities from $179 million to $71 million, including a 60% reduction in total debt from $146 million to $60 million over the last nine months and our mandatory principal amortization payments have gone from $45 million to zero for the remainder of 2023.

Moving to Slide 8 for a review of our Q1 financial results. Revenue for the first quarter was $17.3 million. We mined almost 618 Bitcoin during the first quarter and generated a total mining segment revenue of $13.6 million and total Energy segment revenue of $3.6 million. GAAP net loss was $46.7 million, and adjusted EBITDA was a loss of $3.9 million.

It is important to note that the company’s intense focus on cash cost reductions continue to materialize in the first quarter, and we achieved a net cost of power sub-$50 per megawatt hour in March. During the quarter, we continued to operate in an environmentally beneficial way, removing approximately 259,000 tons of coal refuse from piles and returning approximately 197,000 tons of beneficial use ash to remediate these toxic coal piles.

Let’s move to Slide 9. In an effort to broaden the understanding of our business model, we wanted to provide this simple framework on Slide 9. We have about 165 megawatts of power generation capacity. Current data center load is approximately 95 megawatts, and we expect it to increase to 130 megawatts by the end of Q3 based on guidance.

We optimize our operations to maximize gross profit from the following alternatives; one, curtailed miners to sell power to the grid as power prices are more attractive than Bitcoin mining economics; two, power miners and maximized hash rate if bitcoin mining economics are superior to power prices; and three, reduced plant output and purchase power from the grid if power prices are less than our variable fuel costs, net of renewable energy credits. On this slide, we also provide some explicit guidance for our four key cost categories.

Moving to Slide 10. We Historically, we have focused on two primary drivers of hash price, which are bitcoin price and network hash rate because transaction fees that we earn have historically been between 1% and 3%.

However, since early April, transaction fees have dramatically increased due to a sharp rise in transactions on the Bitcoin network. Increased transactions have led to increased congestion and time to verify transaction. This has resulted in higher incentives for Bitcoin miners to verify transactions.

When the sharp rise in transaction fees is reflected in the hash price calculation, it results in greatly improved bitcoin mining economics. We are not surprised to see increased transaction volume on the Bitcoin blockchain given recent innovations such as ordinal and BRC20-token standard. And we will be watching closely as the trajectory of transactions evolves. It is too early to extrapolate the current trends, and we cannot be sure that there will continue to be increased transactions or the transaction fees will remain higher than in prior periods. However, we believe that it is important to illustrate the positive impact of transaction fees on our primary revenue driver.

I will now turn the call back over to Greg for his closing remarks.

Greg Beard

All right. Thank you, Matt.

Just a shout out, thank you to those that need to be recognized. One of the issues that we’re not covering on this call is plant uptime reliability because we have the plant is in a very good place now. It took more than 150 different people, including contractors to get these plants back where they are.

These are engineers, electricians, line operators, and then dozens of truckers that move this waste to us and hold you benefit or use ash away. So we’ve made a lot of progress, and I wanted to be thankful for those that work in many cases, seven days a week, including holidays to keep this infrastructure going. I’m also a shout out to our General Counsel, who had a — who just got married a few weeks ago. So thank you, Matt. And again, once again, to thank you to Bill for everything you’ve done for the company.

I’ll turn it back over to the operator to close out the call.

Question-and-Answer Session


[Operator Instructions] Our first question comes from Chase White with Compass Point Research. Your line is open.

Chase White

Thanks. Good morning, guys. So for the $2 million to $4 million of maintenance costs for the planned outages, how should we think about that being split between the May and September maintenance periods, obviously, with Scrubgrass not going into maintenance at the end of May versus more than likely both of them going down in September. How should that be kind of split up in the year?

Greg Beard

Good morning, Chase. So [Panther Creek] will have a couple of week outage here in May. And the budget for that is well less than $2 million. Scrubgrass is not taking an outage to spring. And it’s a little too early to know exactly what and if we have outages in the fall.

But at this point in time, we pulled a lot of the work we may have done at Panther Creek forward to this outage so that we may only need to take on outage. If we do something at Panther Creek in September, it would be very limited, I would guess, less than a week. And Scrubgrass, we’ve been working on the redundant systems for the last six months as we shared since the outage in September. We’ve been kind of carefully checking systems, checking redundancies.

And we just didn’t see a need to take an outage in May, given that we’ve been working — we continue to work on the plant, maintain the plant, well, we’re importing power because that’s advantageous to do. I think in September, we have not yet provided guidance on what an outage would look like for Scrubgrass, but I would expect it’s also pretty limited. And so that’s why we gave the range that it’s $2 million to $4 million. And I think I’d like to see it at the lower end of that, but we want to leave ourselves some room in case it makes sense to put some on minor work to continue to push the plants forward.

Chase White

Got it. That’s helpful. And follow-up, if I may. How should we think about the timing and spend on the 25 megawatts of additional capacity to the extent that you guys definitely move forward with that?

Greg Beard

Yes, Chase, we’re focused on getting to the 4 exahash, which we now have numerous opportunities we’re evaluating in order to do that in kind of the unique way that we’ve been trying to accomplish it in a very, very capital-efficient way. We have not yet included anything related to 25 megawatts in guidance. It’s not in the 4 exahash certainly.

We wanted to highlight that we spent money on all of the data center equipment end-to-end that we would need to deploy an additional 25 megawatts of data center. But we have yet to identify a site — when we do, you can imagine we will be very forthcoming about that because it would further the growth project of the business, but it’s not yet in our guidance. And so it’s just too early to talk about, but it’s something we’re certainly focused on internally.

Chase White

Got it. But if you did decide to move forward, was that like how long would it take, I guess, is a better way to ask the question to kind of get from start to finish to get that up and running.


Yes. I don’t model it, but this is something that we’re focused on. So we love to — we spent all the money on the strong boxes, which are the containers that includes a switchgear includes transformers. And so it’s a very — compared to a regular build-out. It’s really cheap. And given that we’ve now demonstrated that we can do what we call sort of quasi hosting agreements with different parties. It’s — and we just obviously announced another one recently there. So we think we can do it in a very low CapEx way.

We’re focused on it and which means this year. But I think don’t put it in your models, let us have the upside from that, but know that we think we have an exahash like sitting on the ground to be picked up and there isn’t a week that we don’t work on the site. And we’ve had — we’ve investigated many different locations and work on to find the right one. But it’s not going to be a big CapEx spend.

Chase White

Got it. That’s helpful. Thank you.


Thank you. And one moment for our next question. Our question comes from Lucas Pipes with B. Riley Securities. Your line is open.

Lucas Pipes

Thank you very much, operator. Good morning, everyone. Thank you very much for the presentation. Lots of detail there and I appreciate all the color. Just to circle back on the ability to toggle back and forth between power generation and importing power, remind us what is the variable cost for Scrubgrass and Panther that would cause — I guess, that would cause you to import power if power prices are lower than that. So I appreciate your additional points on that. Thank you.

Greg Beard

Yes Lucas. Good morning. Thanks for your attention in detail. As we have talked about, the big advantage of being vertically integrated is the ability to buy power from the grid when it’s cheap and then sell power to the grid when it’s expensive and mine Bitcoin in the case or in the in between. So if you think about our variable cost, it’s in the $0.03 range. And that’s true for both plants. The calculus for running a plant or idling it and importing power has — it’s a — there are many, many variables in that.

We need to — what we describe as net out in a month. And so we need to sell more power to the grid than we consume or we get charged the higher rate for the power that we consume. So that’s an important factor. We also earn renewable energy credits when we deliver power to the grid. And that is a — that reward comes later in the year.

So that’s a — so on a given in a given month, we’re not earning the cash from the real line of credit, but it does make sense to later in the year to put that in, and the value of those credits have gone up a lot this year. And so that’s on our minds as well. But if you were looking for the simple answer for your model, around $30 a megawatt, it’s going to make sense to on the day import power rather than run the plant.

But you have to — if you see power prices well below three and say, hey, you’re wondering, hey, why are you running the plants anyway. The answer is because we need that out or there are other considerations like renewable energy credits that we’re using in our calculations.

Lucas Pipes

Very helpful. Thank you, Greg. And you kind of answered my second question. Is there optionality to — given that you can import power to go beyond the four plus 25 megawatts, I guess, exahash capacity, i.e., does it make sense to build data centers import power. I think you answered it in terms of the higher rate you would pay that maybe makes it prohibitive I would appreciate any thoughts on that matter.

Greg Beard

So if I understand your question, it’s candidly put the additional 25 megawatts at an existing plan to import power at the existing — one of the two existing locations. Is that what you’re asking?

Lucas Pipes

Yes. And then even going a step further, would it make sense to go even beyond the 25 megawatts or not given that, I guess, power rates increase if you buy more power than you sell power?

Greg Beard

Yes. So the way we’ve designed the data centers and with our sort of our interaction with the local grid, we think it makes sense to continue to be a net power supplier to the grid, even when the data centers are running at full capacity. That helps us be in sync with the grid and helps us manage the data centers up and down to manage energy flows up and down. That’s what helps make the grid stable.

And while we argue strongly that our presence as power plants coupled with data centers is hugely beneficial to the residents in our node in PJM by making a bit more stable. If we were to use all over the power and essentially disconnect from the grid or only pull power down from the grid. That argument would be lost. And we wouldn’t be stabilizing the grid as much as we are now.

And so I think we’re unlikely to do that. But that’s — it is a — I think there is potential at our sites to put additional power assets because a scrub gas, for example, at 700 acres, and we’re using about half of the transmission capacity of the existing line in place that we own. And there very well could be an opportunity to put renewable assets on site that could then increase the capacity of the power generation that would then cause us to look into expanding the data center, but that’s not on the agenda for this year.

Lucas Pipes

Very helpful. I think Central Park is 800 acres, so that’s a lot of land.

Greg Beard

Come see it, it’s an amazing project. And I think I will — hopefully, at some point, the market will recognize that having power assets, a couple of data centers is — makes the development of renewable energy more possible in our section of the grid. We’re cleaning up a bunch of nasty sites as we do it. And these are not little projects. It’s like sort of seven stores of steel and hundreds of trucks to move the waste into our facility could not duplicate it today.

Lucas Pipes

Very helpful, Greg. I will ask a third question. And it’s actually related. You mentioned earlier the potential for carbon capture and sequestration. I know there’s more — I believe there’s more government support to advance that technology. Is there something on the drawing board at what stages of planning is — are those efforts at extra sides? Thank you.

Greg Beard

Yes. So for the purpose of modeling and CapEx spend, presume that we’re not going to spend any money. But that being said, if you look at what’s in the inflation Reduction Act, it’s a dramatic increase in the value of carbon credits designed for facilities like ours. And when we emit carbon, we argue strongly that all the carbonate we made will be admitted into the environment anyway if the pile sit as they are. And obviously, when we’re doing that cleanup of these areas, that’s creating a hugely beneficial circumstance for the populations that live near those piles.

So — but in spite of all the benefits, the government still wants us to decarbonize as much as possible, and they’ve made the value of carbon credits so high that we have to look at it. So I think at this point, we will say, hey, we are beginning to study strongly the chemical composition of our ash, which we know very well what’s in there. And the attributes of what’s in our exhauster or flue gas and figuring out, hey, what would it cost to decarbonize that flue gas.

So — and I think it’s — give us a quarter, and maybe on the next call, we’ll say, well, and we figured out and it’s cost prohibitive. We might say we found a partner to develop that decarbonization with us. But at this point, what we think is it’s worth a look. So don’t presume anything other than it’s on our minds. And I think honestly what a great environmentally positive impact that would mean if we could actually clean up all of these toxic waste sites and not put — and have a resulting outcome be even less carbon and toxins in the air. That’s a — that would be a great outcome, and we’re working on.

Lucas Pipes

Yes. Yes. No. I guess you’d be carbon negative considering the alternatives. Very helpful Greg…

Greg Beard

That’s absolutely right.

Lucas Pipes

Yes, Greg and team. Really appreciate the color. Continued best of luck to you and your team.

Greg Beard

Thank you.


Thank you. And our next question will come from [Michael Donovan] from H.C. W. Your line is open.

Unidentified Analyst

Thank you Greg, and Matt for taking my question. This is Michael Donovan on behalf of Kevin Dede. Can you talk more to the new business of selling ash, perhaps addressing the cost of transportation such as moving coal and ash out. Also, we’re likely to see higher fuel prices this summer and some of the latest prices haven’t declined. So what should we expect that stronghold X.

Greg Beard

So thanks for getting on and big questions. On the ash, we are — when we sell ash, which we’ve announced a contract, we have a partnership to sell ash now. Most of the benefit is in cost avoidance. So we’re avoiding more than $10 per ton of trucking costs, and we’re gaining a couple of dollars per ton as a sale.

So I think if you modeled in, say, $12 or $13 of net benefit by both selling the ash, that you’re going to be very close in the ballpark. And right now, we’re having ash removed from Panther Creek, and I was just one of our two sites. And what guidance are we giving on tons sold this year.


So we’ve shared that we think the business is in excess of a $1 million benefit this year, and we still feel pretty good about that. We want to be credible in so we want to put things out that we can beat, and we’re going to strive to beat that. But at this point, I can still feel pretty good about that number as a benefit as a net fuel cost deduct. The cost to remove ash from the site is would just call it sort of $10 to $12 per ton that we pay if there’s not an offtake or taking it.

And then there’s the opportunity to earn revenue in addition to that and the agreement — the confidential agreement that we have in place with we’ll go a leading waste management company in the U.S. They help us avoid that cost, and they also pay us a modest amount of revenue. And we think there is really, as we develop these markets, which those spends develop that market from scratch. As we develop these markets, we are going to — we think is upside to the revenue component of the ash sales. And so we’re pretty excited about it, but too early to go beyond that guidance

Michael, ask for your question on diesel. There are a couple of components. There’s a whole recipe to the fuel on our site. It involves bringing in limestone, bringing in coal refuse, and they involve bringing ammonia. We use the [Tampa] ammonia index as kind of the basis for our ammonia versus that index has gone from $1,500 a ton to several hundred dollars of tons reverted meaningfully since last summer. Natural gas and other things are key inputs in pneumonia. That will be seasonal. But we’ve gotten substantial relief in some key cost categories in our fuel costs.

And then REX have gone from $10 to approaching $30 over the last number of months. And so most of our costs, we’ve seen relief in. We’re yet to get excited about it given the volatility. As for diesel, I think what’s interesting about the decent market is we have seen some relief since last year, the decent market is still tight. But we have become, I think, a bit more savvy at managing our working capital.

And we have, for instance, over 100,000 tons of coal on site, ready to go at Scrubgrass when we want to dispatch the plan. And so that would mean for those 100,000 tons, no diesel required other than to take the ash away. So I think we’ve — I wouldn’t bet against us in terms of what we put out better for our cost of power and diesel is a key consideration in that. We look at the full curve as well. And so hopefully, there’s some confidence that we’re incorporating that into our forecast.

Unidentified Analyst

Great. Much appreciated. That’s very helpful. And congrats on the quarter.

Greg Beard

Okay. Great. Thanks. Before — I don’t know if you have more questions, but just for the analysts, make more of your follow-up questions about the — about transaction fees because I think the market is missing a pretty big opportunity there. So any other questions, operator, and then we’ll hopefully get one about that topic.


[Operator Instructions] At this time, this concludes our question-and-answer session. I would now like to turn the call back over to Mr. Baird for his closing remarks.

Greg Beard

Okay. We have a question in the room on transaction fees. So go ahead, Matt.


Yes. I think I think it seems to us to have been lost, but there’s some interesting developments we highlight on Slide 10. And just as a disclaimer, we’re looking to extrapolate the extremes and transaction fees here so far in May, but it’s not surprising to us that block space is becoming a lot more valuable. Bitcoin mining rigs are many toll bridges that were energized on revenue in two ways; through block subsidies, which those are the current 6.25 BTC per block that are known and then through transaction fees, which are also paid to miners in the form of additional bitcoin. There are elegant features built into the Bitcoin blockchain, including market-based congestion pricing.

In this case, various innovations such as ordinal BRC20 tokens are causing increased traffic by putting more data through the blockchain, which has caused congestion as a blade. Higher transaction fees are the correcting mechanism in the blockchain. And if you want to have your transaction verified, you can pay a higher fee to have your transaction verified sooner.

Over the last four to five weeks, we started to see the number of transactions pick up, and it resulted in increased congestion and increased transaction fees. While we expect more volatility going forward and look forward to continuing to verify — we look forward to continuing to verify the transactions on the network and seeing how this develops.

Greg Beard

All right. Thanks, Matt. Thank you, shareholders, analysts in the interest of people. I think — and we’re really proud of the progress we made this quarter. And thank you also to those that we have our partners that have contracted with us and some of whom have become shareholders in the company to White Hart our remaining lender. We have very good relationships with every one of those groups. We’ve made a ton of progress, as I said, and it looks like we’re going to have a fantastic rest of 2023. So, we are thankful and look forward to delivering on that promise. Thank you, operator.


Thank you for joining us today for Stronghold’s earnings call. You may now disconnect.