Bitcoin mining is lucrative, but ‘dangerous to be confined to one country’
With Bitcoin hovering around the $50,000 level at press time, extreme fear was palpable across the market. But, that’s not what the Bitcoin community is concerned about in the long run. In a recent interview, Whit Gibbs, Founder & CEO of Compass Mining, explained why BTC’s hashrate is an important factor to consider. He said,
“The growth of Bitcoins hashrate is incredibly important because obviously as an asset class we want to see it continue to succeed and be secure. “
Applauding the network’s resilience following events like China’s policy decisions this year, Gibbs noted that the hashrate has been rising over the past few months as machines relocated globally.
At the time of writing, Bitcoin’s hashrate was estimated to be 170.06 EH/s with difficulty at 22.34 T. The next upward difficulty reset is expected in about 5 days with its hashrate maintaining its current momentum. According to BTC.com, Foundry USA and AntPool have the largest share in mining pool distribution. However, ‘stealth miners’ have also played a crucial role over the years.
Between mid-October 2021 until now, lots of unknown hashrate (stealth miners) has been very prominent on the #Bitcoin network producing many blocks.
Since 2009 stealth miners have found 226,000 $BTC but during the last six months only 1,957 block rewards (12,200ish BTC). pic.twitter.com/HxBZpmJzRw
— Bitcoin (@Bitcoin) December 6, 2021
Bitcoin raises power shortage concerns
Gibbs also touched upon how global hurdles keep the hashrate uncertain. For example, consider Kazakhstan’s energy shortage. We know that following China’s mining ban, Kazakhstan became the second-biggest beneficiary after the United States. But, Kazakhstan’s President Kassym-Jomart Tokayev recently noted that Kazakhstan is already feeling the first signs of a shortage of electricity.
The United States is now estimated to contribute over 35% to the global hash rate on the back of pools like Bitdeer and Riot Blockchain’s Whinstone. According to Gibbs, huge institutional players are diving into the space as,
“Now it’s[crypto mining] an actual business that you can plan on…”
On that note, a new BTC mining setup is reportedly expected soon in New York State where a coal plant was located. Having said that, Gibbs is positive the U.S will keep on welcoming the mining industry. He added,
“So the United States, I think will be among the first of the developed nations to come out in support of Bitcoin mining just because it’s massive and you’re talking about a multi-billion-dollar industry now within the borders that they’re able to tax.”
On the other hand, he also predicted that some European countries like France and Germany will take a while to get on board. In fact, he doesn’t think that the centralization of mining in the U.S will be a positive outcome in the long run. He explained,
“I think that it’s very dangerous for an overwhelming majority of Bitcoins’ hashrate to be located within any country’s borders.”
This might be similar to when a majority (60%) of the hashrate was estimated to be in China before the ban. Within the U.S itself, states like Texas and New York are among the regions with the most miners.
“Austin is the Bitcoin capital of the United States.”
Meanwhile, recent reports have suggested how Bitcoin capital’s power grid is struggling. Meanwhile, there have been new reports of China’s clampdown on mining operations in the Hainan Province.