Mining power or hash rate returns to May-June 2021 levels.
Businesses consolidate in the mining industry, strengthening Bitcoin.
The Mining Newsletter is a summary of the news that moves Bitcoin mining. It is published on CryptoNews, every two weeks, with today’s edition, Thursday, August 26, 2021, being the second to be published, at block height 697.707.
The growth of the mining industry has continued its escalation and this is reflected in the mining power of the Bitcoin network, as measured by the hash rate or hash rate
Since the publication of our first mining newsletter last August 12, 2021, the Bitcoin hash rate
continues to grow, reaching levels not seen since last June.
Last Monday, August 24, 2021, it is worth noting, there was a peak of 170 EH/s hash rate. This can be directly attributed to a high volume of miners connecting or starting up. However, no operator publicly announced to be responsible for what has been the highest Bitcoin hash rate
last two months.
As of today, August 26, 2021, the Bitcoin hash rate is estimated at 116 exahashes per second (EH/s), returning to levels of last June of this same year. Source: CoinWarz.
At the time of publishing, Bitcoin’s hash rate is at 136 exahashes per second (EH/s), according to CoinWarz
Business strategy: good economic performance of miners boosts the hash rate
Bitcoin mining companies’ strategies seem to be paying off, in a dynamic process of adaptation after a few months of difficulties
After the ban on Bitcoin mining in China, which we reported in CryptoNews, the migration of miners to other countries has not stopped
For this reason the hash rate has been recovering in recent months, which has also brought a 57% increase in the income of miners
, who would be growing their reserves by 5,000 BTC per month, we reported in this media.
Miners sell bitcoins at higher profitability without depleting their reserves
The increase in the price of bitcoin (BTC), which can be viewed at the<a href=”https://www.criptonoticias.com/preci
, can also help miners not having to sell a good part of their reserves to pay for their operations.
One of the indicators to understand the relationship of Bitcoin’s price to miners’ profitability and spending is the Puell Multiple.
This indicator shows how miners tend to sell their coins when BTC goes up in price, while they save or HODL when the price goes down.
That way, miners would accumulate BTC in the bearish market cycle, and make the most profit in the bullish cycle, selling their BTC in exchange for USD (or their home currency) at a higher price than the entry price, to afford their trades.
This implies that the miners’ sales transaction volume would increase with the bull cycle, but they would sell fewer bitcoins, as other analysts have noted
in the past, because the BTC they would have been accumulating are now more valuable. In red, the Puell Multiple. In blue, the historical price of Bitcoin (BTC). Right now, with the price of BTC at 55,000, close to breaking its all-time highs (USD 60,000), miners are reportedly selling some of their reserves, albeit in lower volume than in previous years and cycles. Source: lookintobitcoin.com.
Mining pools: increasing the hash rate
as a business model
In the context of the increase in the hash rate
, mining pools have also had their share of success and responsibility in having greater capacity and mining power.
, respectively, last August 17. This hot streak, which is rare to see nowadays, brought them sumptuous profits of 24 and 16 BTC as reward in a few minutes; more than $1 million, not including the commissions paid by users.
In our previous Hash Noti we reported on the accelerated growth of these two companies (Foundry and SBICrypto) this year, who are reportedly taking advantage of the installation of thousands of miners in North America to break into the top 10 mining pools in the world according to their hash rate
or mining capacity.
As for the distribution of mining pools, AntPool, Poolin and BTC.com saw their mining power on the network grow by 2%, mining more blocks in the last week (Aug. 19, Aug. 26) over the previous week.
Other mining pools did lose a bit of capacity, but there were no drastic changes in the last period studied.
<img width=”612″ height=”401″ src=”https://yellowrocketagency.com/wp-content/uploads/2021/08/pool..png” alt=” />
ASIC equipment maintains good profitability for Bitcoin mining
A good indicator of the status of mining operations is
According to NiceHash
, many Bitcoin mining equipment maintain good profitability over the cost of electrical service, although there are other variables applicable to each individual case, such as taxes paid in your jurisdiction and operating expenses (labor, maintenance, logistics, etc.).
For example, the Bitmain AntMiner S19 Pro would be generating USD 42.99 per day, from which electricity consumption would have to be subtracted. For its part, the MicroBT Whatsminer M30S, would be generating USD 33.61 daily, while the classic Bitmain AntMiner S9 still generates USD 6 daily profitability.
Bitcoin mining difficulty on the road to historical records
As for the
network’s mining difficulty, the minimum cryptographic complexity threshold for miners that Bitcoin automatically regulates every 2,016 blocks (every two weeks, approximately), this increased yesterday, August 25, for the third consecutive time since last July 30, 2021
The adjustment occurred at block height 697,536, at a rate of 13.5%, which left Bitcoin’s difficulty at 17.6T, according to BTC.com
. This figure would be the highest difficulty rate since last June 13, 2021, of 19 T, although during that season the difficulty was plummeting.
In the last three adjustments, the hash rate
has been estimated at 97.87 EH/s (July 17), 103 EH/s (July 30) and 111.29 EH/s (August 13), in a clear uptrend that also forces the difficulty to increase.
Yesterday’s August 25 difficulty adjustment was no different, and this could bring that measurement closer to the all-time high of 25 T that it reached last May 13, 2021. This will be defined in the coming weeks.
Since the May 13, 2021 adjustment, which left the difficulty at 25 T, Bitcoin mining difficulty had been dropping. Last July 30, the negative streak was broken and the difficulty has been increasing with each adjustment since then. Source: BTC.com.
and Difficulty Rise on Low Fees and Transaction Volume
However, this balance between miner power and Bitcoin difficulty has yet to be tested by a high volume of waiting transactions
Throughout the month of August the Bitcoin mempool</ref>.
a>, which is the virtual memory where transactions are stored in standby, did not have a higher volume of transactions compared to previous months, when the network was congested due to the disconnection of miners in China
in June and July.
The highest transaction volume of the current month took place on August 16, reaching 20 million satoshis per vbyte in total fees. Interestingly, most of that transaction volume paid 1 or 2 satoshis per vbyte, the lowest fees you can have in Bitcoin.
August has featured low transaction volumes and low fees in Bitcoin, relative to previous months in 2021, as mining and its industry continues to grow. In pink or magenta, transactions that paid fees of 1 and 2 satoshis per vbyte. Source: Mempool.Space.
It is prudent to caution that if the hash rate
drops drastically at some point, as it did with China’s bans, and transaction volume increases as well, high fees and periods of congestion could return.
However, the fact that countries like Iran are once again allowing Bitcoin mining operations on their territory gives indications that this trend of hash rate
recovery will not lose momentum anytime soon.
Venezuela and Spain: seizures and raids involve Bitcoin mining
Although the mining industry is growing worldwide, it is still an activity that can suffer or experience legal mishaps or even get involved with practices contrary to the regulatory principles of each country
Obviously, this is not an intrinsic evil of Bitcoin mining, but something more related to the low ethics that some mining operators incur. This could create a bad name for the activity in some circles, especially in the regulatory and law enforcement ecosystem.
, alerted by the high electricity consumption located in the area.
Authorities discovered that they were defrauding the electricity system, stealing energy to mine Bitcoin and taking precautions to avoid detection.
On the other hand, in Venezuela, we reported that the disconnected miners in the state of Carabobo were returning to their operations, once the electrical contingency had passed, after reaching agreements with local authorities.
Inadvertently, like the authorities in Spain, Venezuelan law enforcement agencies have been able to get the miners to return to their operations, after reaching agreements with local authorities.
There were indeed offenses in the disposal of toxic material, and the miners were seized, but it is not known if they will be permanently forfeited. The authorities did not reveal the status or validity of the permits of these equipment, which are regulated in the country by the National Superintendence of Cryptocurrencies (Sunacrip).
Clean and Affordable Energy Drives Bitcoin Mining Industry
Bitcoin’s electricity consumption is possibly high compared to other industries, but if we compare the origins and management of this energy, we understand that Bitcoin mining has much less environmental impact than other industrial activities.
Bitcoin’s benefits outweigh its energy cost, according to analyst Julián Drangosh, from Argentina, who participated in the DescentralizAr event. “Bitcoin, like any human activity that is currently carried out, has the right to consume the energy that everyone is willing to pay for,” he said.
In addition, Blockstream became a company valued at more than USD 3 billion and raised USD 250 million to develop and manufacture a new Bitcoin miner, a specialized ASIC equipment together with the company Spoon.
Miners strengthen ties with Bitcoin developers and enthusiasts
Compass Mining awarded an $80,000 grant to Bitcoin Core client developer Jon Atack, who has more than 400 contributions to the software. Previously, Atack also received support from Square Crypto, a company owned by Twitter founder Jack Dorsey.
And speaking of Jack Dorsey, the CEO confessed that he was mining bitcoins with Compass Mining, a company that deals with managing and maintaining Bitcoin mining equipment for private clients. This news is one more step for Jack Dorsey in his journey as a bitcoiner, though he didn’t reveal the details about his foray into mining.
Photoa of the week:
Like the energy and logistics sector of mining companies, the development and manufacture of specialized hardware is an area of interest.
The possibility of making Bitcoin mining more efficient, sustainable and easier to operate gives rise to ideas like this one: building boxes or compartments that neutralize the sound and heat generated by energy-intensive and energy-intensive ASIC equipment.
Bitcoin mining data center provider Upstreamdatainc has shared the process of building a sound- and temperature-insulating box to introduce Bitcoin miners. The box is just a prototype but promises to be a good solution to the noise and heat generated by these machines. Source: Twitter.