Global Hashrate War; Will North America Win?
Bitcoin network hashrate has grown by 100 EH/s in 2023 and 70% YoY. It's estimated that 50% of global hashrate resides in the United States and Canada, but how long this dominance is going to last?
Recently there has been some regulatory changes in the US that is believed to limit the growth of Bitcoin mining operations. On the other hand, Russia seems to be on a mission to grow its global Bitcoin mining footprint.
In this article, I cover the recent headlines in the Bitcoin mining space and the growth of Bitcoin network hashrate.
Bitcoin Network: Catch it if You Can
In April, we saw another month of record highs for Bitcoin Network.
Bitcoin Miners' Three Amigos: Hashrate, Hashprice, Difficulty
Bitcoin network doesn’t seem to be slowing down this year. Network hashrate has grown more than 70% year on year and is currently running at 350 EH/S.
With only 1 year to the next bitcoin halving that cuts the mining reward in half, and older generation machines being profitable, Bitcoin miners are increasing their hashrate to take advantage of the last year of 6.25 Bitcoin per block.
Hashprice has been swinging between $75 PH/Day and low $80s for the past month. It reached the maximum of $83 PH/Day after Bitcoin price broke the resistance level of $30K on April 13th. At these Hashprice, even older generation mining machines with lower efficiency are profitable. For example, a Bitmain S17 with efficiency of 45 J/TH yields $27 profit per month at the electricity price of $0.06 per KW.
It’s been long since bitcoin miners seen a negative difficulty adjustment. In Q1, Bitcoin miners faced a total of 29% positive difficulty adjustment which increased the difficulty from 35T to 47T.
Ordinals: Still Here...
Bitcoin native digital artifacts or Ordinals reached almost 2M inscriptions this month.
Ordinals are satoshis (the smallest units of Bitcoin) that have been inscribed with arbitrary content. They 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.
Since their launch, they have brought lots of excitement and controversies among the Bitcoin community. But reaching almost 2M inscriptions in just a few months is a sign that they are here to stay.
Bill 1751: One Bill, Two Different Perspective
Texas Senate passed a bill that limits Bitcoin and crypto mining incentives for operations.
The bill limits the participation of virtual currency miners in demand response programs to 10% of all the required load.
It requires all the flexible load facilities over 10MW to register with the commission.
It prohibits tax abatement of mining facilities larger than 10MW.
Texas is home for some of the largest Bitcoin mining operations because of its abundant and low-cost power, favourable regulations, and incentives from ERCOT’s demand response programs.
Although some believe this bill slows down the growth of Bitcoin mining in Texas, it can encourage the development of smaller size Bitcoin mining facilities as operations with less than 10MW load are not affected dramatically by this bill. This will support the decentralization and distribution of Bitcoin network hashrate which is important for network security and resiliency.
Russia Bitcoin Mining: 2nd Largest in the World
Russia operated 1GW of Bitcoin mining computing power in Q1 2023 and became 2nd largest operator of Bitcoin mining in the world. With 3-4 GW, United States is still the dominant player in this space.
Earlier this year, Russia announced subsidies and easing the regulations for Bitcoin Mining in some parts of Siberia which has plenty of excess natural gas resources.
Bitcoin Mining is evolving and like any other disruptive technologies, it takes time for the policy makers and general public to understand its benefits for the economy and environment. There will always be resistance and push backs but we shouldn't forget that it's always moving forward. Our job as Bitcoin miners and advocates, is not to fight back, but to take any opportunity to educate and grow.