What Is Bitcoin Mining Infrastructure and How GRIID Scaled It

Bitcoin's network hashrate has grown from 100 exahashes per second in 2020 to over 900 EH/s by mid-2025. That ninefold increase represents an extraordinary buildout of physical infrastructure: warehouses filled with specialized computers, power contracts measured in hundreds of megawatts, and cooling systems running around the clock. Understanding this infrastructure helps explain why Bitcoin mining has shifted from hobbyists with gaming PCs to publicly traded companies deploying hundreds of millions of dollars in capital.

GRIID Infrastructure, before its acquisition by CleanSpark in October 2025, offers a useful case study in how these operations actually work.

What Bitcoin Mining Infrastructure Actually Involves

At its core, Bitcoin mining is a computational race. Miners run Application-Specific Integrated Circuit (ASIC) hardware to solve SHA-256 cryptographic puzzles. The first miner to solve the puzzle receives both transaction fees and the block reward (currently 3.125 BTC after April 2024's halving). This happens approximately every 10 minutes.

The network automatically adjusts difficulty every 2,016 blocks to maintain that 10-minute target regardless of how many miners participate. In August 2025, difficulty hit a record high exceeding 130 trillion, meaning the puzzles have become extraordinarily hard to solve.

This creates a relentless pressure for efficiency. Modern ASIC equipment has achieved efficiency levels exceeding 30 joules per terahash (J/TH), with equipment costs dropping to $16 per terahash in 2025. But hardware is only part of the equation.

The Real Competitive Advantage: Power

Electricity typically represents the largest ongoing cost for mining operations. This explains why the industry has concentrated in regions with cheap, abundant power: Texas, Georgia, and the Tennessee Valley Authority territory, along with Nordic countries and parts of Canada.

The math is straightforward. If your electricity costs twice as much as a competitor's, you need Bitcoin's price to be higher to break even on the same hardware. When margins tighten (as they did after the 2024 halving cut block rewards in half), operations with expensive power simply cannot compete.

This dynamic has pushed miners toward renewable energy sources like geothermal, solar, and wind, not primarily for environmental reasons, but because these often represent the cheapest available power. Some miners have even positioned themselves as flexible load for utilities, powering down during peak demand periods in exchange for lower rates.

How GRIID Built Its Operation

GRIID Infrastructure, founded in 2018 and headquartered in Cincinnati, operated as a vertically integrated Bitcoin mining company. By the time of its acquisition, it had 68 megawatts of mining capacity across facilities in New York and Tennessee.

The company's strategy centered on securing long-term power contracts rather than chasing the highest Bitcoin prices. In February 2024, GRIID announced plans to double its Lenoir City, Tennessee capacity from 20 MW to 40 MW, adding approximately 6,500 mining machines. The expansion leveraged Tennessee Valley Authority's low-cost, reliable electricity.

GRIID reported that 67% of its facility usage came from carbon-free power sources. More importantly for its business model, the company had a contracted power pipeline representing 500% of its existing operational capacity, positioning it for significant expansion without the uncertainty of negotiating new deals.

In 2024, GRIID secured a $525 million credit facility from Blockchain.com to fund its growth plans, capitalizing on over 1,300 megawatts of available power from existing energy generation partners.

The CleanSpark Acquisition

On October 31, 2025, CleanSpark completed its acquisition of GRIID in a $155 million all-stock merger. Each GRIID share converted into approximately 0.06959 CleanSpark shares.

The combined entity targets over 400 megawatts of mining capacity by 2026, roughly doubling CleanSpark's operational scale. The expansion focuses on Tennessee Valley Authority territory, providing geographic and power supply diversity to CleanSpark's existing operations.

This acquisition reflects a broader industry trend: consolidation. Large institutional players, including publicly listed companies, energy firms, and investment funds, now dominate Bitcoin mining. They bring capital, operational efficiency, and regulatory alignment that smaller operations struggle to match.

Where the Industry Is Heading

Several forces are reshaping Bitcoin mining infrastructure.

China's ban on cryptocurrency activities disrupted the global ASIC hardware supply chain. Bitmain historically controlled 80% of the market for these specialized chips. That ban has created opportunities for U.S. manufacturers like Proto to advance chip design and production domestically.

Mining companies are increasingly rebranding as "digital infrastructure providers" and pursuing hybrid strategies. The same facilities that run Bitcoin mining hardware can potentially serve high-demand sectors like artificial intelligence. This diversification helps miners weather Bitcoin price volatility and reduced block rewards.

Mining pools continue to distribute mining power globally, reducing the operational burden on individual participants by handling node operations, block validation, and automatic reward distribution.

What This Means for You

If you're considering investing in mining companies or thinking about mining yourself, the economics have fundamentally changed from Bitcoin's early days. Solo mining with consumer hardware is no longer viable. The industry requires significant capital, access to cheap power, and increasingly sophisticated operations.

For Bitcoin holders more broadly, the professionalization of mining infrastructure represents a maturation of the network's security model. More hashrate generally means more security, and institutional involvement brings regulatory scrutiny that can cut both ways: more legitimacy but potentially more constraints.

The GRIID story illustrates both the opportunity and the challenges. Building vertically integrated operations with long-term power contracts can create defensible businesses. But even well-positioned companies may ultimately find more value as acquisition targets for larger players with greater scale.

Bitcoin mining has become an infrastructure business. The companies that succeed will be those that treat it as one.