Značka: Bitcoin Mining

Bitcoin price plummets while miner hash rate soars to all-time highs

Bitcoin miners can’t stop, won’t stop. The Bitcoin (BTC) hash rate continues to surge to new all-time highs, despite a heavy price drawdown. The Bitcoin mining hash rate peaked at 258 exahashes per second (EH/s) on Oct. 4, according to Braiins Insights, a mining data tools and metrics company. Although the Bitcoin price is down 58% year-to-date against the United States dollar, the mining hash rate is up 43%.The past 3 months Hashrate. Source: Braiins. Bitcoin Gandalf from the marketing team at Braiins told Cointelegraph that, “The hash rate hitting another all-time high shows that miners are bullish about the future prospects of Bitcoin.” Nonetheless, the current macroeconomic environment could pose an issue, as “the present isn’t so rosy for Bitcoin miners,” Gandalf said, adding:“Bitcoin continues to trade in this tight band between $19,000–$20,000 and this recent increase in hash rate will result in a sharp upward adjustment in mining difficulty meaning that miner margins will be further squeezed.”In a series of tweets, mining engineers and hobbyists shared their thoughts regarding the hash rate hitting all-time highs while the price remains low. Rob W of Bitcoin mining company Upstream Data summed up the sentiment: I’m really proud of all of my mining friends, things are going great. pic.twitter.com/dIzh2ITTfq— Rob W. (@BikesandBitcoin) October 3, 2022Market analyst Zack Voell explained that the surging hash rate could be as a result of “XPs coming online.” The S19 XP Antminer is the latest model from Bitmain, one of the world’s most popular Bitcoin mining hardware suppliers. The number of hashes produced in a second is commonly referred to as the hash rate. In Bitcoin speak, hash rate is a critical security metric as well as one that many BTC miners keep their eyes on. In simple terms, the more hashing — or computing power — that the network churns out, the greater the overall security of Bitcoin. As a result, Bitcoin is more resistant to attack, the most common of which is known as a 51% attack. Currently, more and more miners are coming online to attempt to solve valid blocks to receive the Bitcoin block reward, which is currently 6.25 BTC, roughly $120,000. Blocks are solved and added to the Bitcoin blockchain on average every 10 minutes. Related: Nuclear and gas fastest growing energy sources for Bitcoin mining: DataThe difficult adjustment determines the rate at which blocks are solved. It fluctuates roughly every two weeks and is expected to increase on Oct. 10 based on the surging hash rate. The difficulty adjustment has been on a steady march upward in 2022 — meaning blocks are, on average, getting harder to solve — after falling for the first time in March 2022. In sum, despite the fact that the Bitcoin price continues to wallow under $20,000, more and more miners find value in supporting the network. James Check, an analyst at Glassnode, explained in a tweet, “With hash rate pushing to new all-time-highs once again, despite all the promises to the contrary, it appears that #Bitcoin is still not dead.”

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Bitcoin sees first difficulty drop in 2 months as miners sell 8K BTC

Bitcoin (BTC) miners remain under stress at current price levels as data shows large outflows from miner wallets returning.As per on-chain analytics firm Glassnode, monthly miner sales totaled up to around 8,000 BTC in September.Bitcoin miners see heavy salesIn contrast to the June lows, when BTC/USD hit its current multi-year floor of $17,600, miners are currently selling considerable amounts of BTC.According to Glassnode, which tracks the 30-day change in miner balances, at the start of the month, miners were down a maximum 8,650 BTC over the month prior.Bitcoin miner net position change chart. Source: GlassnodeWhile this subsequently reduced, taking into account changes in the BTC price, miners are still selling more than they earn on a rolling monthly basis.As of Sep. 29, the latest date for which complete data is available, miners were down a combined 3,455 BTC over 30 days — nonetheless capping a 1-month low in exchange transactions, Glassnode noted.Bitcoin miners to exchange flow chart. Source: Glassnode/ TwitterThe miner squeeze even caught the attention of mainstream media this week, with Reuters describing the sector as “stuck in a bear pit.”“Bitcoin miners have continued to watch margins compress — the price of bitcoin has fallen, mining difficulty has risen, and energy prices have soared,” the publication quoted Joe Burnett, head analyst at mining firm Blockware, as saying.With BTC/USD forecast to potentially drop even more in line with global macroeconomic strife, miners could face additional hurdles to come.This would further stress an essential component of the Bitcoin ecosystem which just in August ended a “capitulation” phase to claw back some profitability.Difficulty comes off record highsSigns of change are evident in current network fundamentals numbers.At the latest automated adjustment on Sep. 28, Bitcoin mining difficulty decreased by 2.14% — its first decline since July.Related: More ancient Bitcoin leaves its wallet after 10-year hibernationThe metric, which provides multiple insights into network operation and miner buoyancy, was previously at all-time highs.In two weeks’ time, however, the uptrend is estimated to resume, with the ultimate result dependent on price action in the meantime.Similarly, the Bitcoin network hash rate is currently circling slightly lower levels than recent peaks, nonetheless still near all-time highs of its own, according to combined data from BTC.com and MiningPoolStats.Bitcoin network fundamentals overview (screenshot). Source: BTC.comThe views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Nuclear and gas fastest growing energy sources for Bitcoin mining: Data

The electricity mix of Bitcoin (BTC) has drastically changed over the past few years, with nuclear energy and natural gas becoming the fastest growing energy sources powering Bitcoin mining, according to new data.The Cambridge Centre for Alternative Finance (CCAF) on Tuesday released a major update to its Bitcoin mining-dedicated data source, the Cambridge Bitcoin Electricity Consumption Index (CBECI).According to the data from Cambridge, fossil fuels like coal and natural gas made up almost two-thirds of Bitcoin’s total electricity mix as of January 2022, accounting for more than 62%. As such, the share of sustainable energy sources in the BTC energy mix amounted to 38%.The new study suggests that coal alone accounted for nearly 37% of Bitcoin’s total electricity consumption as of early 2022, becoming the largest single energy source for BTC mining. Among sustainable energy sources, hydropower was found to be the largest resource, with a share of roughly 15%.Despite Bitcoin mining significantly relying on coal and hydropower, the shares of these energy sources in the total BTC energy mix have been dropping over the past several years. In 2020, coal power powered 40% of global BTC mining. Hydropower’s share has more than halved from 2020 to 2021, tumbling from 34% to 15%.Bitcoin mining electricity mix from 2019 to 2022. Source: CCAFIn contrast, the role of natural gas and nuclear energy in Bitcoin mining has been notably growing over the past two years. The share of gas in the BTC electricity mix surged from about 13% in 2020 to 23% in 2021, while the percentage of nuclear energy increased from 4% in 2021 to nearly 9% in 2022.According to Cambridge analysts, Chinese miner relocations were a major reason behind sharp fluctuations in Bitcoin’s energy mix in 2020 and 2021. China’s crackdown on crypto in 2021 and the associated miner migration resulted in a major drop in the share of hydroelectric power in the BTC energy mix. As previously reported, Chinese authorities shut down a number of crypto mining farms powered by hydroelectricity in 2021.“The Chinese government’s ban on cryptocurrency mining and the resulting shift in Bitcoin mining activity to other countries negatively impacted Bitcoin’s environmental footprint,” the study suggested.The analysts also emphasized that the BTC electricity mix hugely varies depending on the region. Countries like Kazakhstan still rely heavily on fossil fuels, while in countries like Sweden, the share of sustainable energy sources in electricity generation is about 98%.The surge of nuclear and gas energy in Bitcoin’s electricity mix allegedly reflects the “shift of mining power towards the United States,” the analysts stated. According to the U.S. Energy Information Administration, most of the nation’s electricity was generated by natural gas, which accounted for more than 38% of the country’s total electricity production. Coal and nuclear energy accounted for 22% and 19%, respectively.Among other insights related to the latest CBECI update, the study also found that greenhouse gas (GHG) emissions associated with BTC mining accounted for 48 million tons of carbon dioxide equivalent (MTCO2e) as of Sept. 21, 2022. That is 14% lower than the estimated GHG emissions in 2021. According to the study’s estimates, the current GHG emissions levels related to Bitcoin represent roughly 0.1% of global GHG emissions.Combining all the previously mentioned findings, the index estimates that by mid-September, about 199.6 MtCO2e can be attributed to the Bitcoin network since its inception. The analysts stressed that about 92% of all emissions have occurred since 2018.Total greenhouse emissions related to Bitcoin as of mid-September 2022. Source: CCAFAs previously reported, the CCAF has been working on CBECI as part of its multi-year research initiative known as the Cambridge Digital Assets Programme (CDAP). The CDAP’s institutional collaborators include finance institutions like British International Investment, the Dubai International Finance Centre, Accenture, EY, Fidelity, Mastercard, Visa and others.Related: Bitcoin could become a zero-emission network: ReportThe new CDAP findings noticeably differ from data by the Bitcoin Mining Council (BMC), which in July estimated the share of sustainable sources in Bitcoin’s electricity mix at nearly 60%.“It doesn’t include nuclear or fossil fuels so from that you can imply that around 30-40% of the industry is powered by fossil fuels,” Bitfarms chief mining officer Ben Gagnon told Cointelegraph in August.According to CBECI project lead Alexander Neumueller, the CDAP’s approach is different from the Bitcoin Mining Council when it comes to estimating Bitcoin’s electricity mix.“We use information from our mining map to see where Bitcoin miners are located, and then examine the country, state, or province’s electricity mix. As I understand it, the Bitcoin Mining Council asks its members to self-report this data in a survey,” Neumueller stated. He still mentioned that there are still a few nuances related to lack of data in the study.

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Is post-Merge Ethereum PoS a threat to Bitcoin's dominance?

While Ethereum (ETH) fans are enthusiastic about the successful Merge, Swan Bitcoin CEO Cory Klippsten believes the upgrade will lead Ethereum into a “slow slide to irrelevance and eventual death.” [embedded content]According to Klippsten, the Ethereum community picked the wrong moment for detaching the protocol from its reliance on energy. As many parts of the world are experiencing severe energy shortages, he believed the environmental narrative is taking the back seat. In an exclusive interview with Cointelegraph, Klippsten said “I think the world is just waking up to reality and Ethereum just went way off into Fantasyland at the exact wrong time.”“It is just really bad timing to roll out that narrative. It just looks stupid.”According to some predictions, institutional capital will increasingly turn away from Bitcoin (BTC) and flow into Ethereum unless Bitcoin doesn’t move away from the energy-consuming proof-of-work system. Klippsten dismisses this narrative as false, citing that, ultimately, all valuable technologies need to rely on real-world energy to function correctly. “If you don’t have some tethering to the real world using laws of physics, you’re basically off creating some kind of like metaverse fantasyland”. Watch the full interview on our YouTube channel and don’t forget to subscribe!

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BTC mining firm Compute North files for bankruptcy

Bitcoin (BTC) mining hosting firm Compute North has filed for chapter 11 bankruptcy, amid growing pressure on the firm due to the effects of crypto winter and rising energy costs. The firm’s CEO Dave Perrill has also stepped down but will remain on the board. The company submitted a Chapter 11 bankruptcy filing in the U.S. Bankruptcy Court for the Southern District of Texas on Sept. 22, which is now pending before Judge David Jones. Under a Chapter 11 filing, the firm is still able to keep its operations going as it works out a plan to repay creditors. The filing reportedly outlines that Compute North owes around $500 million to 200 creditors, while its assets are said to be worth between $100 million and $500 million. Compute North offers large scale crypto mining hosting services and facilities, hardware and a BTC mining pool. It is one of the largest data center providers in the U.S. has big name partners in the BTC mining sector such as Compass Mining and Marathon Digital. Both companies have come out with statements via Twitter, noting that with the information they have at this stage, their business operations will continue as normal. “Compute North’s staff informed us today that the bankruptcy filing should not disrupt business operations. We are continuing to monitor the situation and will provide further updates as they become available,” noted Compass Mining. Today, a filing related to one of our hosting providers was published. Based on the information available at this time, it is our understanding that this filing will not impact our current mining operations.— Marathon Digital Holdings (NASDAQ: MARA) (@MarathonDH) September 22, 2022The bearish performance of BTC in 2022 has had a significant impact on the mining sector this year, and in the context of Texas, rising energy costs and multiple power outages during intense heat waves haven’t helped either.Related: Maple Finance launches $300M lending pool for Bitcoin mining firmsBloomberg Business reporter David Pan highlighted on Twitter that Compute North may have been impacted by a costly delay to a large mining facility in Texas that it wasn’t able to monetize for months. “Compute North’s massive 280MW mining facility in TX was supposed to run rigs in April but it couldn’t due to pending approvals. From then to later this year when it finally was able to energize the machines, Bitcoin prices had gone through multiple downward cycles, fundraising opportunities dried up and major lenders scaled back,” he wrote. Compute North adds to a long list of crypto firms that have either fallen victim to crypto winter — or in some cases helped create it — including Voyager Digital, Three Arrows Capital, Celsius Network and BlockFi to name a few.

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Bitcoin is trapped in a downtrend, but a ‘trifecta of positives’ scream ‘deep value’

$20,000 is no longer support. $100,000 didn’t happen. The Bitcoin halving is 562 days away.Bears simply refuse to release their vice grip on the market and the Federal Reserve’s policy of interest rate hikes and quantitative tightening is adding fuel to the fire. Despite these challenges, in a Sept. 15 Twitter Space hosted by Cointelegraph, Capriole Fund founder Charles Edwards explained why he is still bullish on Bitcoin. Edwards said that several on-chain metrics suggest that BTC is undervalued: “I see incredible deep value and I kind of call it a trifecta and that we have three positive things happening in my mind. One is cycle timing, where between years two and three, which historically has been where all of the Bitcoin cycles are bottomed. The second is that we’ve hit 90% of normal cycle down draws. Now, obviously, all of these things can go lower, but that alone is a bit of a good value signal. And then thirdly, just the readings across pretty much all on-chain metrics, whether it be Mayer Multiple, whether it be Puell Multiple, or NVT or dormancy, everything is at kind of one in four year level discounts. So for me, it’s kind of that once a cycle opportunity that we see at the moment.”When asked about his thoughts on the previous Bitcoin halving and how the current economic environment might impact the next halving, Edwards said: “I think it was successful because it placed Bitcoin as one of the hardest assets in the world in the midst of massive monetary printing. And we did see a lot of the old school traditional finance, legendary investors, Druckenmiller, etc. kind of get into Bitcoin because of that as it’s kind of a hedge more or less. And that kind of triggered the next 6 to 12 months of rallying. I also think that the crypto industry still does run on the Bitcoin halving cycle kind of time frame. For now. I don’t think they will continue forever, but for now I do still think it holds weight and impact in how people invest in the space. With each subsequent halving the incremental value of the drop in inflation for bitcoin is negligible because it’s already — barring Ethereum — now the hardest asset, or harder than gold.”2022 has proved that risk management and building a balanced portfolio is still a skillset crypto investors are working to develop. Edwards said: “Whatever your method is, however you are trading or investing, whether using stop losses or not as a strategy. You need to do some detailed modeling over as much data as you can and not just two years of data, because that’s how entities have blown up in the past. Do as much as you can, like 10 years of Bitcoin at least, and assume the worst and then add again an element of buffer below that to manage your position sizing.”Tune in and listen to the full episode!Disclaimer. Cointelegraph does not endorse any content of product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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Norwegian town wants 'noisy' Bitcoin miners out, experts respond

There’s a new Bitcoin (BTC) energy FUD in town: noise. In Sortland, a Norwegian municipality, locals are waging war on Bitcoin miners to thwart further BTC mining developments. Their latest protest against proof-of-work (PoW) mining is that it’s loud. It’s not enough that Bitcoin miners in Sortland use 100% renewable energy sources, create jobs and even use waste heat from the PoW process to dry out timber and seaweed for local businesses; they must do so quietly. Sortland (red) in the extremes of Norway. Source: GoogleKjetil Hove Pettersen, CEO at local KryptoVault, explained that it could be another case of media spin aiming at Bitcoin. He explained the situation to Cointelegraph:“It is usually the negative voices that get the most media attention; this does not reflect on all local opinions.”Pettersen detailed that grid owners are, in fact, happy to host Bitcoin miners–as Bitcoin miners help to balance grids (as recently shown in Texas)–and that “There is a political or social cost for being outspoken about that in today’s climate.” The false narratives that media create are not new, according to Pettersen:”[…] The narrative that we are suppressing other industry establishments by using (the skeptics use the word “wasting”) so much energy, while in fact, the opposite is true. Sometimes we are accused of driving up the energy price, which also is not true.”Arcane Research analyst Jaran Mellerud and regular Cointelegraph contributor explained: “Northern Norway has a massive electricity surplus due to little local demand and limited transmission capacity.” In the north of Norway, where Sortland is located, energy costs are very low, and stranded hydropower is, in fact, abundant. Pettersen listed the benefits of Bitcoin mining as adding more revenue to local municipalities’ power grids while supporting grid balance; lowering the overall grid fees for consumers; creating jobs; earning income for the Norwegian treasury as Bitcoin miners pay taxes and finally, contributing to Norway’s national trade balance. That’s without mentioning the direct consequence of Bitcoin mining, securing the world’s largest cryptocurrency. CSO at the Human Rights Foundation, Alex Gladstein visited Kryptovault and spoke of “positive externalities.” Source: TwitterPettersen conceded that the Bitcoin industry has “A lot of work to do in telling our story, and dispelling myths and misconceptions.” Bitcoin provides a lifeline to many around the world–particularly in the global south–but the narrative that Bitcoin mining uses more energy than neighboring Finland continues to compel mainstream media publications. Related: Seven times Bitcoin miners made the world a better placeSimilar to Pettersen, for Mellerud, it’s a question of storytelling and narratives. He sums it up succinctly, “Municipalities in northern Norway should appreciate Bitcoin mining as a way to refine the electricity locally.” He continued:Bitcoin mining facilities create local jobs and increase the income for the municipalities as they often own the local power-generating companies.”Unfortunately, narratives that demonize Bitcoin mining and energy consumption continue to make headlines. Noise could be next.

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Michael Saylor slams “misinformation” about Bitcoin's energy use

Ahead of Ethereum’s (ETH) transition to proof-of-stake, Bitcoin (BTC) maxi Michael Saylor has come out swinging against what he says is “misinformation and propaganda” about the environmental impacts around proof of work (PoW) BTC Mining. The MicroStrategy executive chairman, who recently stepped down as CEO, shared a lengthy post on his Twitter account on Sept. 14, detailing seven of his “high level thoughts” on BTC mining and its impact on the environment. Given the sheer volume of misinformation & propaganda circulating lately, I thought it important to share the truth regarding #Bitcoin Mining and the Environment.https://t.co/CRkayFwDsj— Michael Saylor⚡️ (@saylor) September 14, 2022One of his key arguments was against the notion that PoW BTC mining isn’t energy efficient. Instead, Saylor claims it is the “cleanest industrial use of electricity and is improving its energy efficiency at the fastest rate across any major industry.”He backed up his argument with figures taken from the Q2 Global Bitcoin Data Mining Review published in July by the Bitcoin Mining Council, a group of 45 companies that claim to represent 50.5% of the global network, noting: “Our metrics show ~59.5% of energy for bitcoin mining comes from sustainable sources and energy efficiency improved 46% YoY.”Saylor’s argument comes as the BTC mining industry has received a lot of pressure over its alleged impact on the environment, which has even led to certain U.S. states taking steps to ban crypto mining.Saylor claims that constant improvements to the network and “relentless improvement in the semiconductors,” makes mining far more energy efficient than large tech companies such as Google, Netflix, or Facebook.“Approximately $4-5 billion in electricity is used to power & secure a network that is worth $420 billion as of today,” argued Saylor. “This makes Bitcoin far less energy intensive than Google, Netflix, or Facebook, and 1-2 orders of magnitude less energy intensive than traditional 20th century industries like airlines, logistics, retail, hospitality, and agriculture.”Saylor also claimed that 99.92% of carbon emissions in the world are due to industrial uses of energy other than bitcoin mining.Looking at the numbers, Saylor does not believe environmentalist arguments condemning PoW mining are fair. Rather, in his opinion, it’s an attempt to “focus negative attention on Proof-of-Work mining” and distract authorities from the “inconvenient truth that Proof-of-Stake crypto assets are generally unregistered securities trading on unregulated exchanges.” In one of the more high-profile legal cases at the moment, Ripple is embroiled in a lawsuit with the Securities and Exchange Commission (SEC) for allegedly conducting an unregistered securities sale in the form of XRP.Related: Michael Saylor got wrecked, but Bitcoin investors needn’t panicIn closing, Saylor says all the negativity toward PoW mining distracts from the possible benefits for the world. “Bitcoin mining can bring a clean, profitable and modern industry that generates hard currency to remote locations in the developing world, connected only via satellite link.”

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Crypto miner Poolin offers IOU tokens after suspending withdrawals

Poolin, one of the largest Bitcoin mining pools by hash rate, has announced it will be issuing IOU tokens in an effort to “minimize the impact of withdrawal suspension” for users. In a Tuesday blog post, Poolin said its wallet service will be releasing IOU ERC-20 tokens for users unable to withdraw their Bitcoin (BTC), Ether (ETH), Tether (USDT), Litecoin (LTC), Zcash (ZEC) and Dogecoin (DOGE) holdings. On Sept. 15, the mining pool will issue IOUBTC, IOUETH, IOUUSDT, IOULTC, IOUZEC and IOUDoge, respectively, at a 1:1 ratio based on users’ holdings following the suspension of withdrawals due to reported “liquidity problems.””Our priority, for the time being, is to resume withdrawals of as many coins/tokens as possible,” said Poolin. “The company now is striving for multiple solutions to solve the short-term shortage of liquidity, including seeking new investments, debt-equity swaps and assets liquidating.”According to Poolin, users will have the number of original tokens in their assets and mining accounts “set to zero” following the issuance of IOUs, which the mining pool claimed could be withdrawn at any time automatically. In addition, the platform said it planned to eventually burn all the IOUs after users were given the opportunity to trade them back for their original tokens on chain or with third parties, buy mining rigs or purchase shares in Poolin’s U.S. company.Related: Bitcoin mining revenue jumps 68.6% from the lowest-earning day of 2022Other platforms have taken a similar approach — releasing IOU tokens — when faced with liquidity problems. In 2021, DeFi transaction combination tool Furucombo suffered an exploit that cost the protocol $15 million, later issuing 5 million iouCOMBO tokens as part of a compensation plan for victims.Launched in 2017, Poolin is a China-based mining pool that operates under Blockin. According to data from BTC.com, the firm was responsible for roughly 10.6% of the BTC blocks mined over the previous 12 months, coming in as the fifth-largest mining pool behind Foundry USA, AntPool, F2Pool and Binance Pool.

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Crypto miner Poolin pauses BTC and ETH withdrawals, citing 'liquidity problems'

Poolin, one of the largest Bitcoin mining pools by hash rate, has announced it has temporarily suspended Bitcoin and Ether withdrawals from its wallet service due to “liquidity problems.”In a Monday announcement, Poolin said its wallet service was “facing some liquidity problems due to recent increasing demands on withdrawals” and planned to temporarily stop payouts of Bitcoin (BTC) and Ether (ETH). In its Telegram channel, Poolin support told users it was “hard to name a specific date” on which it would resume normal service, but hinted it could be a matter of days, while the help page stated, “time and plans of resume will be released within 2 weeks.”“Please be assured, all user assets are safe and the company’s net worth is positive,” said Poolin. “We will make a snapshot of the remaining BTC and ETH balances on pool on September 6th to work out the balances. The daily mined coins after September 6th will be normally paid out per day. Other coins are not affected.”Launched in 2017, Poolin is a China-based mining pool that operates under Blockin. According to data from BTC.com, the firm was responsible for roughly 10.8% of the BTC blocks mined over the last 12 months, coming in as the fourth-largest mining pool behind Foundry USA, AntPool and F2Pool.Bitcoin mining pool distribution based on blocks mined. Source: BTC.comRelated: Ethereum Merge prompts miners and mining pools to make a choiceThe mining pool was the latest in the crypto space to announce it would be halting withdrawals amid a bearish market. Many exchanges including Coinbase and FTX said they would be temporarily pausing withdrawals of ETH during the transition of the Ethereum blockchain to proof-of-stake, expected to take place between Sept. 10 and 20. 

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The Bitcoin bottom — Are we there yet? Analysts discuss the factors impacting BTC price

When Bitcoin was trading above $60,000, the smartest analysts and financial-minded folk told investors that BTC price would never fall below its previous all time high. These same individuals also said $50,000 was a buy the dip opportunity, and then they said $35,000 was a generational buy opportunity. Later on, they also suggested that BTC would never fall under $20,000. Of course, “now” is a great time to buy the dip, and one would think that buying BTC at or under $10,000 would also be the purchase of a lifetime. But by now, all the so-called “experts” have fallen quiet and are nowhere to be seen or heard. So, investors are left to their own devices and thoughts to contemplate whether or not the bottom is in. Should one be patient and wait for the forecast “drop to $10,000” or is now the time to buy Bitcoin and altcoins?Generally, calling price bottoms is a futile task. What’s really important to focus on is whether or not there are fundamental reasons for choosing to or not to invest in Bitcoin. Sure, price has changed drastically, but have Bitcoin’s network fundamentals and the infrastructure surrounding Bitcoin as an asset improved or degraded? It’s important to zoom in on this data because for investors, this is where one should be sourcing their confidence and investment thesis. This is exactly why Cointelegraph hosted a Twitter Spaces with analysts Joe Burnett of Blockware Solutions and Colin Harper of Luxor Mining. Here’s a few highlights from the conversation.Equities markets will decide when Bitcoin price can “go back up” According to Blockware Solutions analyst Joe Burnett, Bitcoin price is heavily impacted by Federal Reserve policy and its impact on equities markets. Burnett said: “The macro environment is obviously heavily weighing on the price of Bitcoin. High CPI inflation has led to an aggressive Fed since November of 2021. Higher interest rates inevitably cause all assets to come down. Interest rates are basically gravity on financial assets, just basically discounted cash flow analysis. And these increasing interest rates are an attempt to destroy demand and and destroy inflation by the Fed. It’s obviously putting pressure on all risk assets, including Bitcoin.” When asked about the Bitcoin hash ribbons on-chain indicator suggesting that BTC had bottomed and miners had capitulated confirming that the Bitcoin bottom was in, Burnett said “I think with every sort of like on chain type metric, you definitely have to take it with a grain of salt. You can’t look at it in a vacuum and say, yes, the bitcoin bottom is in.” Burnett said: “If US equities do make new lows, I certainly expect Bitcoin to follow. With that being said, I mean, if you’re looking at the fundamentals of Bitcoin itself, I think minor capitulations do typically mark Bitcoin bottoms. And a hash driven indicator that Charles Edwards created is basically depicting that there was a minor capitulation this summer.”Related: Canaan exec says opportunity outweighs crisis as Bitcoin miners struggle with shrinking profitsSynergy between Big Energy and Bitcoin miners is a net positive for BTCDiscussion of the growing partnership between big energy providers, oil and gas companies and industrial-size Bitcoin miners has been a hot topic throughout 2022, and when asked about the direct benefits of this relationship to Bitcoin itself, Colin Harper said:“I don’t think that mining does anything bad or good for Bitcoin. I think it’s good for Bitcoin in the sense that it will actually in the long run strengthen network security, decentralize mining and put it in like basically every corner of the globe if you have energy producers mining it. But in terms of actually doing anything to the price, I think that’s just a kind of a wider adoption case. And as to whether or not people will be using it day to day as a medium of exchange, store of value and just general investment.”Harper elaborated with, “If these companies do start mining it, then it becomes more palatable. It becomes less stigmatized. Depending on, I guess the oil producer and that person’s politics.” When asked about what Bitcoin mass adoption might look like in the future, in relation to the growth of the mining industry, Harper explained that: “It’s just going to be a matter of time before they start integrating Bitcoin into their stacks. And I think that’s when things get interesting in terms of mining as an industry because if you have the producers of the energy and the people who own the energy mining Bitcoin, then that makes it very hard for people without those assets to eventually turn a profit because you’re going to see hash price, which already trades in backwardation. Eventually, you can imagine a future where only energy producers and those who are invested with or embedded with energy producers can actually turn a profit on their bitcoin mining.”Regulation and a growing desire to self-custody will drive Bitcoin Lightning Network growthBoth analysts agreed that while it may take a handful of years, the growth potential for layer-2 Bitcoin is bright. Burnett predicted that “over time more and more people will learn to demand final settlement of their Bitcoin, meaning that more people will hold their own keys.” According to Burnett: “If Bitcoin adoption grows by 100x or 1000x, there’s going to be a lot more competition for scarce block space and on-chain fees will likely rise just because people will be demanding much more settlement, magnitudes more settlement on the base layer. But the block space to settle on the base layer is fixed. So these on chain fees rising will basically, in my opinion, potentially make lightning channel liquidity that’s already open and available. It’ll make it more valuable.”Harper wholeheartedly agreed and added that, in his opinion, the Lightning Network “will be the thing that allows Bitcoin to be used as a worldwide medium of exchange and also, like Jack Maller has put it, It’s the thing that can kind of separate Bitcoin, the asset from Bitcoin, the payment network in a way that’s actually scalable.” Tune in here to listen to the full conversation of the Twitter Space. Disclaimer. Cointelegraph does not endorse any content of product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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Armenia aims to position itself as a Bitcoin mining hub

At the end of August, a digital platform called ECOS Free Economic Zone delivered good news from a country that rarely sparks on the global crypto map — Armenia. ECOS reported adding 60 megawatts (MW) of capacity to its power plant-based facility, operating since 2018. Situated at one of the hydroelectric plants on the Hrazdan river, the mining facility gets its electricity supply directly from the high-voltage grid and uses the site’s infrastructure to power containers. The platform’s representatives noted that ECOS could expand to an additional 200MW of clean electricity. For comparison, the Berlin Geothermal plant in El Salvador gives away 1.5MW of the 102MW it produces to crypto miners, while the Greenidge Generation near the shore of Seneca Lake in the State of New York should have produced about 44MW. Given the controversial developments with crypto mining regulation in the Commonwealth of Independent States (CIS) region — countries of the former Soviet Union — perhaps it is high time to assess the industrial potential of this post-Soviet republic, towering 1,850 meters above sea level. Modest publicityThe most certain fact about Armenia regarding crypto is that we don’t get much information from the country. In 2018, the Armenian Blockchain Association joined its counterparts from Switzerland, Kazakhstan, Russia, China and South Korea in filing a joint lawsuit against tech goliaths such as Google, Twitter and Facebook for banning crypto-related advertising. The lawsuit’s further destiny is unclear, though the restrictions on crypto ads have been uplifted at least to some extent in recent years. The same year, Prime Minister Nikol Pashinyan and other top officials reportedly attended the opening ceremony of a new mining farm touting itself as one of the world’s largest. By local media estimates, around $50 million had been invested in the creation of the farm with 3,000 Bitcoin (BTC) and Ether (ETH) mining machines and a planned capacity of 120,000 in the future. The farm is a joint venture by major Armenian conglomerate Multi Group, founded by businessman and politician Gagik Tsarukyan and controversial international mining firm Omnia Tech. No updates about the work of the farm have hit the media radar since the very opening press releases. Perhaps the most important and publicly visible development from the country of three million was the failure of efforts to form a shared stance regarding cryptocurrency regulations by the Eurasian Economic Union (EAEU). In 2021, a high official from EAEU revealed that member states did not support a recent initiative for a uniform cryptocurrency regulatory framework within the union. While no insights on what exact members sabotaged a project are available, the failure itself will have a long-lasting impact on the whole region, as the EAEU includes not only Armenia and Belarus but also such mining heavyweights as Russia and Kazakhstan. Large ambitionsWhile there are no traces of the existing legislative framework on crypto in the country (and no prohibition as well), Armenia stepped on its regulatory path back in 2017 by forming a committee on blockchain technologies. In 2018, the local Ministry of Finance launched a working group called JAF Crypto Market Intelligence Unit (JAF CMIU), whose task was to study possible regulatory scenarios. That same year, a special Free Economic Zone (ECOS) was established by the government decree to help attract and develop blockchain and crypto startups. The potential residents of the 2.2-hectares ECOS are granted the financial benefits of zero value-added tax (VAT), the absence of import and export duties and no tax burden on property and real estate. As the official page goes, the ECOS also offers multifunctional workspaces, a research and development center, acceleration programs and the infrastructure comprised of a power plant, data center and mining farm with Bitmain equipment. The only tax to which the zone residents are subject is a monthly payment of income tax for employees. The mining capacities of the free economic zone are secured by the electricity from the Hrazdan Thermal Power Plant, situated in a mountainous region of Armenia with a low average annual temperature, making it advantageous for cutting cooling costs. Recent: Crypto volatility may soon recede despite high correlation with TradFiSpeaking to Cointelegraph, ECOS marketing manager Anna Komashko cites the latter fact as a serious advantage, nodding to the recent problems for miners in Texas after a scorching heatwave in the Southern state. As she specifies, currently 60% of the Armenian facility’s 260,000 users are from the United States and Europe. A mountain of mining?Armenia posseses at least two large mining facilities, one of them marketing itself as state-of-the-art. The country’s government also seems moderately friendly toward crypto, albeit without any concrete legislation being considered. But is this enough to consider the nation particularly attractive for investments?Perhaps such broad factors as the country’s ascendance in transparent governance ratings, the large intake of IT specialists who’ve left Russia, and the natural leaning to attract the high-tech and service businesses in the absence of significant hard industry could also work in Armenia’s favor. But, with crypto mining, the decisive importance still lies in the realm of the material, i.e., the overall energy profile of the country. Data from a 2021 study by the DEKIS Research group at the University of Avila ranks Armenia 56th in the global crypto mining potential ranking. The position itself isn’t too low — for example, with all its gargantuan ambitions, El Salvador occupies only line number 73. Kazakhstan, which for a short period became the prime spot for Chinese miners, sits at 66th, and Iran ranks 115th. But more interestingly, by its potential, Armenia outranks neighboring Georgia (83th), which has established itself as a mining hub and by 2018 ranked second around the globe in Bitcoin (BTC) mining profitability.However, one might question the DEKIS report itself as, according to its data, both mountainous countries possess near to zero amount of renewable energy (0% in the case of Georgia, 0.1% in Armenia, to be precise). Speaking to Cointelegraph, Arcane Research analyst Jaran Mellerud recited remarkably different figures: “In Georgia, 75% of the electricity is generated by hydropower, while this number is only 31% in Armenia.” These numbers, Mellerud believes, make a difference for potential miners who naturally seek cheaper energy. While hydropower has almost zero marginal production cost, natural gas and nuclear power — which still form a total majority of power supply in Armenia — are way less convenient for collateral use. After all, Mellerud can’t consider the country as an especially attractive direction for foreign mining due to local prices: “The problem is high electricity prices, especially now when natural gas prices are going through the roof, and a significant share of Armenia’s electricity is generated by natural gas. I was in Georgia this summer, and even there, miners are leaving the country.”By 2021, the price per kilowatt hour (KWh) of energy in Armenia amounted to $0.077, which was relatively lower than in developed markets (take an example $0.372 in Germany or even $0.15 in the United States), but still higher than in Kazakhstan ($0.041), Uzbekistan ($0.028) or Iran ($0.005). With the inflation of global energy prices, the numbers may change significantly, but it hardly would lead to significantly different outcomes. Recent: Blockchain firms fund university research hubs to advance growthAccording to the country’s profile from International Energy Agency (IEA), Armenia is heavily dependent on Russia in terms of its consumption, importing around 85% of its gas and all of its nuclear fuel from there. All in all, it relies on fuel imports from one country to produce nearly 70% of its electricity, “raising concerns about the diversity of supply.” As a report from OCCRP suggests, even the rising amount of small hydroelectric plants provided only 9% of consumed energy by 2013, with environmental scientists raising concerns about these plants endangering local rivers’ water balance.

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