Bitcoin started the year off on the strong foot. New all-time-high records in the Bitcoin network, public mining companies strategies to survive the bear market and prepare to grow in the upcoming bull run, and Rise of Ordinals were some of the highlights in Bitcoin Mining industry.
In this article we cover these highlights and bring you up to speed with the most important movements and innovations in the industry. You can also listen to it on Fountain, Spotify, Apple Podcasts, or YouTube.
Bitcoin Miners' Monthly Horoscope: Hashprice, Network Hashrate, and Difficulty
Bitcoin network is stronger and more secure than ever. Last month, Bitcoin network hashrate reached an all-time-high of 300 EH/S and a difficulty of 39T. This is mainly due to more miners coming online because of available supply of cheap ASICs at all time low prices and increase in Bitcoin price.
In addition to all time high network hashrate and difficulty, miners also faced two positive difficulty adjustments throughout the month. Total difficulty adjustment in January was +11.27%, highest after October 2022.
On the other hand, hashprice increased from $59 PH/Day in the beginning of the month to $79 PH/Day at its highest for the month of January. This is the highest that hashprice has reached in almost 3 months.
Hashprice maintained to stay above $70 PH/Day for most of the month and this brought a little bit of relief to Bitcoin miners as at this price, all the new generation miners with efficiency under 38 J/TH are profitable at the electricity price of 6 cents.
Rise of Ordinals
Bitcoin’s largest block in history was mined. This block contained a 3.94-megabyte Bitcoin Native Digital Artifact and weighted 3.99 million weight units.
Bitcoin Native Digital Artifacts or Ordinals are satoshis that have been inscribed with arbitrary content. Ordinals enable users to inscribe satoshis and give them individual identities. These Bitcoin native digital artifacts can be held in Bitcoin wallets and transferred using Bitcoin transactions. This is the first time that Bitcoin Blockchain is being used for a purpose other than peer-to-peer transactions.
Since its launch late last year more than 100,000 ordinals have been inscribed. Now how this new innovative use case on Bitcoin Blockchain and its user adoption impacts Bitcoin miners revenue is yet to be seen but we know for sure that Ordinals are fun!
Public Miners Survival Strategies
2022 was a very tough year for bitcoin miners. All time low hashprice, all time high network hashrate and difficulty, historical increase in electricity price and hosting providers bankruptcy made it very hard for mining companies to survive the bear market. To keep up with the increasing competition to mine more blocks and make more Bitcoins especially with the halving coming up next year, mining companies have to get creative and adopt new strategies.
Canadian Bitcoin mining company Hut 8 (TSX: HUT) announced merger with US Bitcoin and becoming a US-based company. This is a big news for mining industry and especially Canadian miners.
The new company will operate as Hut8 Corp and will have a total of 825 MW of hosting, self-mining, and managed infrastructure across their operating sites in Canada and the United States.
Hut8 currently has an operational capacity of 2.5 EH/S across Canada and holds 9274 Bitcoin in their reserve.
Another public mining company that is adopting new strategies to grow is Marathon (NASDAQ: MARA).
Marathon announced a joint venture with FS Innovation to build and operate data centers in Abu Dhabi for the purpose of mining digital assets. Newly formed venture, Abu Dhabi Global Markets will build two data centers with the capacity of 250 MW.
Marathon currently doesn’t operate its sites and utilizes hosting providers for its operations. Marathon’s operation was disrupted in many instances in Q1 & Q2 last year due to hosting provider’s delay in facility maintenance and energizing Marathon’s miners.
But the company has made a great recovery since. Marathon now has 71000 operating fleet producing 7.3 EH/s and plans to increase its hashrate to 23 EH/s by mid-year 2023.
Upon deployment of all their previously purchased miners, Marathon expects that 66% of its hashrate to come from S19 XP series which are 30% more energy efficient.
The company produced 687 Bitcoins in January, a 45% increase from its December production. Marathon now has 11,418 Bitcoins.