In the Bitcoin mining world, the ongoing brutal bear market has eaten away profits, causing the difficulty of generating blocks to drop by 7.32% after miners turned off their machines.
This mining difficulty adjustment at block height 766,080 is the largest downward/negative change since July 2021, according to mining pool BTC.com data. July 2021 is when multiple miners dropped out of the network after China banned the industry.
The mining difficulty automatically adjusts according to the hashrate, keeping the time it takes to mine a Bitcoin block fairly stable. The more miners work, the higher the difficulty, and vice versa.
The 2022 bear market saw the price of Bitcoin drop by 65%, reducing miner earnings. According to the Luxor Hash Price Index, mining profitability has dropped by around 20% in the past month. Currently, miners are caught between paying higher electricity bills that increase costs while sliding revenues.
Luxor analyst Jaran Mellerud said: “Miners who have purchased spot power and are already operating near breakeven have seen their operations shift into cash flow negative territory as power prices rise. It’s possible,” he said.
The situation is getting worse with more miners coming online, new efficient machines being delivered, and higher hashrates. Both hashrate and difficulty have increased by about a third between August 21st and November 21st, when the last upward adjustment was made.
Bitcoin Regulatory Status
Bitcoin mining has struggled to match BTC’s price, which is trading around $16,800 at the time of writing, but regulators are working to increase oversight of the sector.
Paraguay rejects mining bill
It could wreak havoc on mining in the House of Representatives of the fast-growing South American nation of Paraguay. did not pass A bill to regulate cryptography in the country.
Paraguay is known for having the lowest energy prices in the world, attracting Bitcoin miners to the country. For those unaware of the problem, a bill to regulate cryptocurrencies and legalize mining in the country was passed by the Paraguayan Senate in July, but was rejected by President Mario Abdo Benitez the following month. rice field.
The bill was therefore sent back to Congress for amendment and re-voting. But this Monday, the bill only got 36 votes in the House, while he needed 41 to pass.
Speaking to the House of Representatives of Paraguay’s parliament, Vice Speaker Tito Damien Ibarrola said the country has abundant renewable energy and would benefit from taxes levied on the bitcoin mining industry.
However, local grid operator provider Ande and some lawmakers argued that the grid’s infrastructure could not handle the excessive load and that the bitcoin mining industry did not bring significant benefits to the local economy and society. doing.
Ande asked the government to raise miners’ fees by as much as 60% above industrial fees, but the proposed bill would limit Ande’s ability to raise miners’ fees to 15%. has been a major obstacle for grid operators. government.
Senator Ted Cruz Wants Texas To Be A Cryptocurrency Hub
Meanwhile, Senator Ted Cruz wants to make Texas a cryptocurrency sanctuary in the United States. Speaking at his Texas Blockchain Summit 2022 in late November, the politician said the crypto industry could play a strategic role in US energy supply and technology development.
Cruz emphasized that the state’s abundant, relatively low-cost energy and openness to free enterprise make it an attractive location for the cryptocurrency industry. The senator further argued that bitcoin mining could be used to monetize the energy produced by oil and gas extraction. He further emphasized using mining activities as an alternative means of storing and supplying energy.
In his speech, the Republican lawmaker said he is a bitcoin fan and buys bitcoin every week because he sees it as an investment “because the government can’t control it.”
Bitcoin stands for “economic independence,” and “the rise of bitcoin mining in Texas has huge positive benefits for the resilience of the grid,” Cruz added.
Kentucky PSC Survey
Meanwhile, in Kentucky, the Public Service Commission (PSC) has formally Investigation About two proposed contracts expected to offer discounted electricity prices to new crypto mining operations.
Environmental law group Earthjustice is working with PSC to determine whether subsidies to cryptocurrency mining operations will increase electricity bills for Kentuckians.
Bitki-KY has already secured a $250,000 tax credit after passing a tax cut bill for local crypto miners in Kentucky, and the proposed deal will facilitate discounts on electricity bills to the Ebon facility. It is believed that
“We hope that the European Commission will understand the empty promises of these crypto mining companies to benefit their communities. […] In the future, more scrutiny of such contracts will be required. “Cryptocurrency mining is a largely unregulated and highly energy-intensive industry that can wreak havoc on the daily lives of Kentuckians,” said a senior attorney at Earthjustice. says Thomas Cmar.
The group said cryptocurrency mining operations rarely offer employment opportunities and pressures on the cost of developing new mining facilities “often , befall everyday people.”
Mining company performance
When it comes to Bitcoin miners, major producers such as Argo Blockchain (ARBK) and Core Scientific (CORZ) are grappling with the liquidity crisis, while Compute North has filed for Chapter 11 bankruptcy protection. is applying for But not everyone performs so badly.
Hut8 going well
Hut 8 Mining Corp. (Nasdaq: HUT) report In the period ending November 30th, Bitcoin holdings increased by 238, bringing the total self-mining holdings to 8,925 Bitcoins.
Last month, North American Bitcoin miners generated 238 BTC. This represents an average production rate of about 7.9 Bitcoins per day. 100% of these mined Bitcoins were hoarded by the company, in line with his HODL strategy over the years.
The miner had 3.27 EH/s of ASIC hashrate capacity installed, but only 2.44 EH/s was available for operation after mining activity was halted at the North Bay mining facility. Meanwhile, 2,000 new MicroBT Whatsminer 30S++/+ have been installed at the Medicine Hat mining facility to improve efficiency and enhance hashrate capacity.
“At the same time, our balance sheet-first approach allows us to continue to HODL everything we mine, creating the largest self-mined, burden-free Bitcoin stack of any publicly traded company. We continue to grow,” said CEO Jaime Leverton. .
Gridless Raises Capital
Bitcoin mining company Gridless is helping bring new energy generation to rural communities in East Africa. Safe A $2 million seed funding round led by Stillmark and Block, Inc.
The new funding will support further expansion of the company’s bitcoin mining across African markets in need of “affordable electricity.”
Erik Hersman, CEO of Gridless, which designs, builds and operates Bitcoin mining sites, said: Small renewable energy producers in rural Africa where surplus energy is underutilized.
The company has already signed five project pilots in rural Kenya, three of which are now operational, and plans to expand to other parts of East Africa in the near future.
According to Hersma, Africa presents a great opportunity to diversify bitcoin mining globally and “help strengthen the security of the network.” On the other hand, the abundance of renewable energy on the African continent “has high potential to benefit both generators and miners, demonstrating its ability to make a real positive impact on the communities where the energy is used.” I will,” he added.
riot switch mining pool
Bitcoin mining company Riot Blockchain (NASDAQ: RIOT) report BTC production in November 2022 increased by 12% to 521 BTC compared to November 2021 which recorded 466 BTC production.
The miner also sold 450 BTC, generating a net profit of around $8.1 million. As of November 30, 2022, Riot held approximately 6,897 BTC.
The fleet of machines deployed by the company included 72,428 miners with a hash rate capacity of 7.7 exahash per second (“EH/s”). Riot.
Les points out that Bitcoin produced in November is still lower than expected production of around 660 Bitcoins based on operating hashrate for a month, assuming normalized performance of mining pools. Did. However, fluctuations in mining pools can affect results, and Riot’s bitcoin production may be lower than expected.
“To ensure more predictable results going forward, Riot will be moving to a different mining pool that offers a more consistent reward mechanism.This will help Riot reach its goal of reaching 12.5 EH/ We will be able to fully benefit from our rapidly growing hash rate capacity as we work towards the first quarter of 2023,” Les added.