New cryptocurrency firm used to be known as Mechanical Technology

Until recently, Soluna was known as Mechanical Technology, a longtime publicly traded company that makes sophisticated test and measurement machines used in the aviation and semiconductor sectors.

But after a private equity firm known as Brookstone Partners invested several million dollars in Mechanical Technology back in 2016, the company began undergoing a significant transformation, including getting into the cryptocurrency market, using high-end computers to “mine” for cryptocurrency, or digital currency.

It’s not like mining for gold or silver. Cryptocurrency mining is the process by which a certain type of cryptocurrency is able to grow.

When a cryptocurrency is used to buy something, the underlying details of the transaction are then confirmed by miners – or mining companies. This decentralized system of auditing cryptocurrency transactions is designed to prevent fraud. The miners, or mining companies, have to use computing power to solve complex mathematical problems in order to verify a transaction or a portion of a transaction.

But these miners or mining companies aren’t paid in dollars. In fact, they may not get paid at all. The first miner to solve a certain transaction is then awarded newly issued cryptocurrency, the incentive that drives the industry in the first place and keeps it operating. 

Earlier this month, Mechanical Technology acquired a company called Soluna Computing – and then changed its own name to Soluna – as part of its total transformation into a cryptocurrency mining company.

Soluna says that what sets it apart from other cryptocurrency companies is that it is addressing the biggest complaint about cryptomining companies, which is that they use too much electricity to power their data centers that mine for cryptocurrency.

Instead, Soluna buys “excess” electricity from renewable energy companies that operate wind or solar farms. Because these renewable energy sources can vary throughout the day and often face bottlenecks in the electrical transmission grid, they sometimes end up with excess power they cannot sell.

Soluna has vowed to power its data centers on this excess renewable energy, which is a novel idea.

The change in the company’s strategy appears to be paying off. During the third quarter of 2021, Soluna’s revenues increased 54 percent to $5.1 million, of which $3.1 million was from its growing cryptomining business.

Cryptominers measure their workload through what is known as hashes, which are produced when an encrypted file for a cryptocurrency transaction is verified.

The more computing power a cryptomining firm has, the more hashing it can do, and the more cryptocurrency it can earn.

Soluna wants to build up its computing power to be able to complete one quintillion hashes per second in the coming months, what is known in the industry as reaching 1 “exahash” of computing, a considerable milestone.

“Watch us scale,” CEO Michael Toporek said in a statement issued Monday when the company released its quarterly financial results.