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Riot Platforms, Inc. Statement: The New York Times’ Politically Driven Attack On Bitcoin Mining Is Full of Distortions & Outright Falsehoods

2023-04-10 17:19 ET - News Release

Castle Rock, CO, April 10, 2023 (GLOBE NEWSWIRE) -- Riot Platforms, Inc. (NASDAQ: RIOT) (“Riot” or the "Company”), an industry leader in Bitcoin (“BTC”) mining and data center hosting, issues a statement in response to The New York Times’ (“NYT”) April 9, 2023 article “The Real-World Cost of the Digital Race for Bitcoin” (the “Article”).

Amid yet another banking crisis, Bitcoin offers consumers and businesses much-needed optionality for storing value, and the ability to take custody of their own assets. Bitcoin mining operations are also providing jobs, tax revenues, and many other benefits to rural communities, including grid stability and incentives for alternative energy production.

That is why we were especially disappointed to read a false and distorted view of our Company and our industry in the Article published by The NYT. Worse still, The NYT chose to publish the Article with information its authors knew to be false and misleading, ignoring the factual information that we provided to them.

To be clear, our Bitcoin mining operations do not generate any greenhouse gas emissions, similar to any other data center for Facebook, Amazon or Google – yet we have been singled out. Our data center uses electricity from the Texas grid, which is the cleanest and most renewable energy-sourced grid in the United States.

We also proudly participate in various programs that help to stabilize the electric grid and actually reduce power prices, despite what critics incorrectly assume. Unlike other industries, we can shut down at a moment’s notice, making power available to other users and critical infrastructure during extreme weather events, while offsetting losses from curtailing our operations.

We are especially proud to be the largest employer in Milam County, Texas, and that our dynamic and talented workforce is spurring economic activity that is strengthening the local economy.

This reporting appears to be driven by fringe political interests, but we will not be deterred from our core mission of helping to build a global, universally accessible network for Bitcoin and supportive, resilient communities where our operations are located.

In that spirit, we are compelled to publish here, our full responses to the NYT questions we received in the weeks prior to publication. As anyone can see, accurate information was blatantly ignored because it did not fit the narrative the NYT was trying to spin.

We wish to highlight below for the public and our shareholders the truth compared to some of the story’s most glaring deficiencies, which include at least the following:

1. NYT Distortion: The NYT compares electricity usage of Bitcoin mining data centers to peoples’ homes. That is an arbitrary, inflammatory, and political choice. It is very telling that they compare Bitcoin miners to “another New York City’s worth of residents.” The NYT appears unaware that this statement admits condescension towards Americans who choose to inhabit rural areas in the middle of the country. The obvious implication by the NYT is that New York City residents should be allowed to consume electricity; data centers in rural America should not.

Reality: The fact is that nearly any industry that uses electricity, i.e., manufacturing, other data centers, iron and steel, chemicals, or even home air conditioners, use orders of magnitude more electricity, generated by a higher percentage of fossil fuels, than Bitcoin mining data centers. (See: Cambridge Bitcoin Electricity Consumption Index (CBECI) (ccaf.io).) The NYT appears to have singled out this industry because the NYT has tied itself to political interests opposed to decentralization of authority. Choosing who can and cannot use energy based on political considerations is a dangerous path inconsistent with the values of a free society.

2. NYT Distortion: They state that Bitcoin mining operations “can create costs” including “higher electricity bills and enormous carbon pollution.”

Reality: Electricity bills have increased due to a variety of reasons, including inflationary monetary and fiscal policy, Russia’s invasion of Ukraine, and restrictive energy policies by the U.S. federal government. Bitcoin miners do not emit any pollutants at all. They simply use electricity—just like, say, electric cars. Bitcoin miners actually decrease electricity bills by purchasing power at off-peak times and competitively bidding for demand response programs, which are particularly useful during peak periods. In making their claims, the NYT relied on a proprietary hypothetical simulation and failed to open-source the data so that it can be properly challenged.

3. NYT Distortion: In “Texas … Bitcoin companies are paid by the grid operator for promising to quickly power down if necessary to prevent blackouts. In practice, they rarely are asked to shut down and instead earn additional money while doing exactly what they would have been doing anyway: seeking Bitcoin.” And they go on to claim that operators made tens of millions of dollars.

Reality: This is an absurd characterization. How would Bitcoin miners earn money from a program where they are—according to the NYT—not participating? Riot is not compensated for “promises,” we are compensated for providing ERCOT the ability to directly manage Riot’s energy load. We also invest hundreds of millions of dollars into developing our business in our Texas community, for which we are then afforded the right to bid competitively in demand response programs, in which we are compensated for selling the curtailment decision to ERCOT. Under these programs, ERCOT controls Riot’s curtailment in exchange for competitive, market-based fees.

4. NYT Distortion: “Bitcoin mines bring significantly fewer jobs, often employing only a few dozen people once construction is complete, and spur less local economic development. Their financial benefit flows almost exclusively to their owners and operators.”

Reality: Notice the selective language here— “often” and “almost.” The NYT deliberately avoided citing a specific example. Had they cited Riot, they would have had to admit that Riot employees hundreds of full-time employees, has used hundreds of local contractors, and is the largest taxpayer in the county and school district. They were provided with this information well before publication and chose to circumvent it rather than acknowledge it.

5. NYT Distortion: “Many Bitcoin businesses promote their ability to operate in rural areas where renewable energy is abundant. But those claims have hit a hard reality: A vast majority of that renewable energy would be used even in the absence of the mines, so fossil fuel plants almost always need to produce additional electricity as a result of their operations.” They go on to state that Riot operates on 96% fossil fuel, using a “marginal emissions” calculation.

Reality: This is utterly baseless and nonsensical. Riot purchases electricity from the Texas energy grid, which uses approximately 24% wind, 10% nuclear, and 4% solar. (See: Texas’ Energy Profile.) However, Riot operates exclusively in rural areas where wind and solar are abundant and otherwise wasted during off-peak times, thereby further diversifying the grid’s energy mix and leaning much more heavily on renewable sources. The NYT even admits that “renewable generation takes years to build and usually requires commitments from customers who can guarantee that they will buy power for a decade or more.” Bitcoin miners make such commitments and are ideally positioned to do so.

6. NYT Distortion: “If Riot had been fully operating [on June 23, 2022], it would have incurred an estimated $5.5 million in fees — costs that are largely made up by other Texans. Over the course of the year, this saved Riot more than $27 million in potential fees.”

Reality: We believe this is false and demonstrates a total lack of understanding of power markets. Riot provided the NYT with a rational and factual explanation to clarify this erroneous statement, which can be found in the link provided above. We even noted that that it was “unclear” regarding what data they could possibly be referring to.

By implication, the NYT’s preference appears to be that Riot should refuse to curtail so that it pays higher fees; yet the implication of the entire article is that Bitcoin miners should not be allowed to operate at all. Both of these alternate realities are incongruous and insidious.

The fact of the matter is that Riot participates in many of ERCOT’s ancillary services programs, which add to grid reliability and ultimately reduce power prices, benefiting all of the tens of millions of ERCOT customers. Riot is proud to do so.

About Riot Platforms, Inc.

Riot’s (NASDAQ: RIOT) vision is to be the world’s leading Bitcoin-driven infrastructure platform.

Our mission is to positively impact the sectors, networks and communities that we touch.  We believe that the combination of an innovative spirit and strong community partnership allows the Company to achieve best-in-class execution and create successful outcomes.

Riot is a Bitcoin mining and digital infrastructure company focused on a vertically integrated strategy. The Company has Bitcoin mining data center operations in central Texas, Bitcoin mining operations in central Texas, and electrical switchgear engineering and fabrication operations in Denver, Colorado.

For more information, visit www.riotplatforms.com.

Safe Harbor

Statements in this press release that are not historical facts are forward-looking statements that reflect management’s current expectations, assumptions, and estimates of future performance and economic conditions. Such statements rely on the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Words such as “anticipates,” “believes,” “plans,” “expects,” “intends,” “will,” “potential,” “hope,” and similar expressions are intended to identify forward-looking statements. These forward-looking statements may include, but are not limited to, statements about the benefits of acquisitions, including financial and operating results, and the Company’s plans, objectives, expectations, and intentions. Among the risks and uncertainties that could cause actual results to differ from those expressed in forward-looking statements include, but are not limited to: unaudited estimates of Bitcoin production; our future hash rate growth (EH/s); the anticipated benefits, construction schedule, and costs associated with the Navarro site expansion; our expected schedule of new miner deliveries; our ability to successfully deploy new miners; M.W. capacity under development; we may not be able to realize the anticipated benefits from immersion-cooling; the integration of acquired businesses may not be successful, or such integration may take longer or be more difficult, time-consuming or costly to accomplish than anticipated; failure to otherwise realize anticipated efficiencies and strategic and financial benefits from our acquisitions; and the impact of COVID-19 on us, our customers, or on our suppliers in connection with our estimated timelines. Detailed information regarding the factors identified by the Company’s management which they believe may cause actual results to differ materially from those expressed or implied by such forward-looking statements in this press release may be found in the Company’s filings with the U.S. Securities and Exchange Commission (the “SEC”), including the risks, uncertainties and other factors discussed under the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as amended, and the other filings the Company makes with the SEC, copies of which may be obtained from the SEC’s website, www.sec.gov. All forward-looking statements included in this press release are made only as of the date of this press release, and the Company disclaims any intention or obligation to update or revise any such forward-looking statements to reflect events or circumstances that subsequently occur, or of which the Company hereafter becomes aware, except as required by law. Persons reading this press release are cautioned not to place undue reliance on such forward-looking statements. 

Alexis Brock
Riot Platforms, Inc

Phil McPherson
Riot Platforms, Inc.
303-794-2000 ext. 110

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