The total computing power in Bitcoin’s network, also known as the hashrate, reached a new all-time high on September 1, when the hashrate clocked in at 742 exahash per second. According to CryptoQuant’s data, the hashrate has been gradually increasing since 2021, which is also due to the improvement of equipment.
Bitcoin miners under pressure
An increase in the hashrate means that it becomes harder for miners to mine Bitcoin. The costs of mining (in hashrate and electricity) will therefore increase. August 2024 was not a great month for miners. Profitability was at its lowest level since September 2023.
The financial challenges for miners were also captured in a recent report by JPMorgan (US banking giant), which revealed that miners’ profits are being squeezed at several points (declining block subsidy and rising energy costs).
According to the report, listed miners such as Marathon Digital and Riot Platforms are particularly under pressure. They pay an average of 55,700 and 62,000 dollars per mined Bitcoin after the halving.
Such high costs and reduced revenues mean that many mining companies are also looking at other ways to raise more money, such as by also shifting the focus to AI applications for the equipment or by selling shares instead of taking on additional debt.
Sustainable energy as the answer?
Companies like Marathon Digital and Riot Platforms are also experimenting with renewable energy to stay competitive. MARA, for example, is currently converting methane gas from landfills into usable energy.
The mining giant also signed an agreement with the Kenyan government to develop the country’s renewable energy infrastructure, another indication that MARA wants to focus more on renewable energy.
That’s also the cool thing about Bitcoin, that it forces companies to use energy as efficiently as possible. Funnily enough, you quickly end up with sustainable solutions. For example, they mainly use energy that would otherwise have been lost.
Bitcoin miners can provide a solution, because they buy the energy that no one else is interested in. The advantage of Bitcoin miners is that you can easily move them and turn them on and off. Which makes Bitcoin easy to move to places where excess energy is available.
Ultimately, this is also good for the narrative surrounding Bitcoin’s energy consumption.
Trade €10,000 for free and get €10 bonus
Want to enter the crypto world and perhaps buy Bitcoin or another crypto? Now is your chance! Thanks to a special deal between Newsbit and Bitvavo, our readers get an exclusive offer.
Create an account at Bitvavo using the button below and receive a welcome gift of 10 euros completely free. And that’s not all – you will also pay no trading fees on your first 10,000 euros in transactions for 7 days after registering your account.* Sign up now!
*Please note that terms and conditions apply to this promotion.
Source: https://newsbit.nl/hashrate-bitcoin-bereikt-nieuwe-all-time-high/
