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Bitcoin miners hunt places with clean, cheap energy

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Bitcoin crypto currency coin with cracked China flag. Crypto restrictions

Since a few months ago, thousands of Bitcoin miners (mainly large mining companies) have tackled a big problem: with the Chinese government’s ban on mining, they now had to figure out how to get millions of computers out of the country.

Amid energy fundamentals from Texas to Kazakhstan, the Bitcoin mining industry seeks to reinvent itself in order to come out stronger and stronger on this temporary issue.

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All under the fear that a headlong rush into new markets would drive up the costs of all of them.

Among the mining community, a slogan even emerged from this process: “Keep together for warmth, say no to ruthless competition,” in reference to the heat emitted by mining machines.

Chinese miners, forced to leave behind the country’s cheap electricity (from abundant coal and rivers), were launched into the world.

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Just as miners raced toward the gold fields in California and Alaska more than a century ago, Bitcoin miners are now racing toward whatever reliable, inexpensive energy source they can find.

What matters most for the viability of mining?

Typically, computers that perform Bitcoin mining are stacked on shelves in large warehouses, often with huge water-cooling fans.

In China, warehouses were often located close to their energy sources, such as hydro and thermal power plants.

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Electricity accounts for about 80% of a mining company’s operating cost, according to Tyler Page, CEO of Cipher Mining Technologies Inc.

The physical attributes of a site are also important: extreme temperatures and an excessively dry and sandy environment, for example, can greatly reduce the life of machines.

Renewable sources

For some mining companies, the decision to move from China is also an opportunity to clean up their energy supply.

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It’s hard to say how clean Bitcoin mining is in general, as each location has its own source of energy supply. While some of this energy is green, most of the world’s electricity still comes from burning fossil fuels.

Renewable energy sources, such as wind and sun, can be plentiful at times, but demand for them tends to increase as cars, home heating and heavy industries increasingly switch to electricity.

The Nordic region, which has long been a popular Bitcoin mining site because of its ample hydropower, began running out of excess electricity earlier this year as industries ramped up production.

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regulatory concerns

Miners also need the confidence that they won’t wake up one morning to the news that their business has been banned again.

Even within the United States, there are regulatory differences between states. Texas is the only state with an unregulated power grid, Ohio has cheap energy prices and cleaner energy. A state like New York, where lawmakers previously proposed a bill that would limit crypto mining in the state, doesn’t look as attractive.

Kazakhstan

To use as an example, one can observe Kazakhstan, one of the favorite destinations of miners recently. China’s neighbor country is also cold enough that data centers don’t require any air conditioning to prevent overheating, which could add up to 30% more energy consumption.

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But there is a limit to Kazakhstan’s potential: its electricity grid has added just over 3 GW of capacity in the last 20 years, and this limitation is leaving little room for the growth of mining machines at the site.

In addition, there is a temporary issue involved: transporting machinery from China overland would be cheaper, but trucks could be stranded at the border for weeks. As a solution, this transport can be done by air, which further increases the cost of travel.

Future

As with any free market, stability will naturally (at some point) be achieved.

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While China’s restrictions have strangled the Bitcoin mining industry for now, the problem looks more like a temporary one.

As capacity grows in places like the US, BitOoda estimates that the amount of computing power used for mining will return to pre-crash levels in early 2023 and continue to grow for the rest of the decade.

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Peter Schiff Names Real Reason Behind Bitcoin Drop

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Popular digital assets critic believes that measures against inflation are the real reason behind the most recent market correction

The famous Bitcoin and crypto critic, Peter Schiff, provided his Twitter subscribers with a potential reason behind one of the largest corrections on the cryptocurrency market this year.

According to Schiff, Bitcoin’s correction was tied directly to the Fed’s action toward risk assets like cryptocurrencies and some stocks. Previously, Jerome Powell hinted that tapering might happen sooner than the market expects.

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In addition to the end of the quantitative easing monetary policy, Powell has stated that the point rate may be increased sooner than was expected due to the inflation’s change of nature, which has become a real threat to the country’s economic safety and stability.

All of the actions that the Fed is currently taking are designed to control inflation, which is currently hitting highs previously observed back in the Depression era.

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High-risk assets like Bitcoin and other digital assets were allegedly considered a store of value for those who wished to protect their funds from increased inflation. Schiff is a widely known critic of cryptocurrencies, and he believes they should not be considered an inflation hedge.

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Whales Suddenly Move $320,000,000 in Bitcoin to a Single Destination – Here’s Where the Crypto Is Headed

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Crypto whales just moved over 5,800 Bitcoin (BTC) worth more than $327 million into a single destination, according to a whale-surveilling platform.

Whale Alert tells its 1.8 million followers in a series of tweets that in the last 24 hours crypto whales are relocating thousands of BTC amid a correction that saw Bitcoin tumble to a new 30-day low of $52,416.

Five of the transactions involved shifted BTC from wallets of unknown origins to popular US-based crypto exchange Coinbase. Meanwhile, one transaction moved a large sum of Bitcoin from global crypto exchange Binance to Coinbase.

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Here’s a summary of the BTC transactions:

While crypto investors tend to be concerned that a massive influx of Bitcoin into the crypto exchanges might indicate downward selling pressure, insights firm Into the Block reports that centralized exchanges recorded more outflows than inflows during the past week.

The crypto intelligence platform says,

“Bitcoin recorded nearly $2 billion in net outflows from centralized exchanges, the highest level in five weeks.”

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At time of writing, BTC is down nearly 7.14% on the day to $52,557.

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Ethereum Price Analysis: ETH drops 25 percent from previous swing high, ready to recover?

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  • Ethereum price analysis is bullish today.
  • ETH/USD rejected further downside at $3,600.
  • Previous support at $3,950 is currently tested as resistance.

Ethereum price analysis is bullish today as we expect further recovery to follow after a strong reaction higher from the $3,600 was seen this morning. Likely ETH/USD is set to break above the current resistance, moving to regain even more over the weekend.

Ethereum Price Analysis: ETH drops 25 percent from previous swing high, ready to recover? 1
Cryptocurrency heat map. Source: Coin360

The market has seen strong bearish momentum over the last 24 hours. The market leader, Bitcoin, has lost 17.23 percent, while Ethereum 14.83 percent. Meanwhile, the rest of the market has seen even more substantial losses.

Ethereum price movement in the last 24 hours: Ethereum breaks below $3,950 previous support, rejects more downside at $3,600

ETH/USD traded in a range of $3,739.39 – $4,647.29, indicating extreme volatility in the market. Trading volume has spiked by 113 percent, totaling $41.2 billion, while the total market cap trades around $465 billion, resulting in the market dominance of 21.16 percent.

ETH/USD 4-hour chart: ETH reacts back to previous lows

On the 4-hour chart, we can see the Ethereum price swiftly rejecting further downside after touching the $3,600 mark this morning.

Ethereum Price Analysis: ETH drops 25 percent from previous swing high, ready to recover?
ETH/USD 4-hour chart. Source: TradingView

Ethereum price action saw strong bullish momentum during the first half of the week. After establishing and retesting the new low at $3,950 last weekend, ETH/USD started to move higher on Monday quickly.

Ethereum reached $4,750 resistance by Wednesday, as bulls were eager to move towards the previous all-time high. However, more upside did not follow, leading to a reversal over the next days.

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Another attempt to test upside was seen Yesterday, with the following rejection leading to a strong spike lower. Overnight, the Ethereum price broke past the previous swing low at $3,950, leading to more downside this morning. Strong reaction, preventing further downside, was seen at $3,600, with ETH/USD since moving back towards the previous low.

Ethereum Price Analysis: Conclusion 

Ethereum price analysis is bullish today as we saw a swift drop to $3,600 met with a strong reaction higher this morning. Therefore, we assume ETH/USD has set a new swing low, and further recovery should follow over the weekend.

While waiting for Ethereum to move further, see our articles on the Best Crypto Wallet 2021, Decred Wallet, and Ripple vs SEC.

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