TODAY'S PAPER
Broken Clouds 63° Good Afternoon
Broken Clouds 63° Good Afternoon
Business

Long Blockchain says it won’t buy computers to ‘mine’ bitcoin

The Farmingdale company, formerly known as Long Island Iced Tea, still plans to merge with a UK financial technology firm.

Long Blockchain chief executive Philip Thomas in an

Long Blockchain chief executive Philip Thomas in an undated photo. Photo Credit: Long Island Iced Tea

Long Blockchain Corp. said Friday it is abandoning its plan to buy 1,000 special computers and power supplies used to “mine” the cryptocurrency bitcoin.

The Farmingdale company, formerly known as Long Island Iced Tea Corp., said in a news release that it will seek to close on the merger deal announced in January with Stater Blockchain Limited, a financial technology company based in the United Kingdom, and explore alternative opportunities in blockchain technology.

Shares of Long Blockchain rose 2.3 percent to close Friday at $3.11 despite declines of more than 2 percent in the Dow Jones industrial average and the Standard & Poor’s 500 index.

The price of bitcoin continued its recent decline late Friday afternoon, falling 6 percent to $8,586. That’s less than half the cryptocurrency’s 52-week high of $19,871.

In January, the company called off a planned stock sale whose proceeds would have been used in acquiring the 1,000 Antminer S9 computers and power systems that are used in creating new bitcoins.

“While we continue to believe in the value of mining equipment to the blockchain ecosystem, the purchase of these machines — which was negotiated as a no-risk option to the company — was just one of the multiple strategic avenues we have been considering,” Shamyl Malik, a director who leads the company’s blockchain strategy committee, said in a statement. “We will continue to evaluate the purchase of mining equipment for bitcoin and other digital currencies as part of our larger blockchain initiative, which includes, among other potential transactions, the proposed merger with Stater.”

In December, the company announced it was shedding the Long Island Iced Tea corporate name and refocusing on cryptocurrencies and blockchain technology, though its iced tea unit would continue to sell beverages.

Bitcoin and other types of cryptocurrency are digital currencies that are not tied to a bank or government. The coins are created by users who “mine” them by lending computing power to verify other users’ transactions. They receive coins in exchange.

A blockchain is a global running ledger of every transaction in the currency. The technology is also being developed for a variety of other uses, including stock transactions and health care.

More news

Sorry to interrupt...

Your first 5 are free

Access to Newsday is free for Optimum customers.

Please enjoy 5 complimentary views to articles, photos, and videos during the next 30 days.

LOGIN SUBSCRIBE