Noti Hash: Bitcoin mining is growing and Ethereum awaits the Merge

Bitcoin network chart.

Noti Hash is CriptoNoticias’ Bitcoin mining newsletter. It is published on our website every two weeks, being today, Thursday, August 25, 2022, the 27th edition to be published, at block 751096.

The difficulty of Bitcoin mining had, last Thursday, a slight upward increase. It went from 28.17 T to 28.31 T. It is the second positive adjustment that this metric has, after the big drop on July 21, which was reported at the time by CriptoNoticias.

Charles Edwards, founder of Capriole Investments and creator of the Hash Ribbons market signal, is convinced that “Bitcoin mining capitulation officially ended”.

Despite these signs of recovery, during the last two weeks, Bitcoin mining companies faced difficult situations. This was the case, for example, of Core Scientific. This company, which contributes 10% of the hashrate of the Bitcoin network, had to lay off 10% of its staff.

As explained, the cost cut was due to an “impairment” of goodwill equivalent to USD 840 million. In addition, they had a decrease of $150 million in digital asset savings and $106 million in operating expenses.

While some companies are struggling, others see in this situation a niche for new businesses. CriptoNoticias announced on August 16 that Bitmain and Antpool launched a line of loans for miners in trouble.

It is worth clarifying that these are “solidarity loans” with extremely low rates. Miners will be able to use them to buy new equipment or to cover operating expenses, such as electricity consumption.

Bitcoin network chart.
The difficulty of the Bitcoin network increased slightly last week. Font:

Table of Contents

Bitcoin mining in Latin America: news from El Salvador and Argentina

Latin America was present in the mining news of the last two weeks. In El Salvador, a country where bitcoin (BTC) is legal tender, investment grows for the “extraction” of this currency.

The Anchor I mining farm, which is being built in the Chalatenango region, will implement an immersion cooling project. In addition, the facility will have a solar power plant to take advantage of inexhaustible natural resources.

Bitcoin mining farm.
Salvadoran government officials tour the Bitcoin mining farm under construction. Font: Milena Mayorga – Twitter.

Josué López, a Salvadoran who leads the project, wrote the following on his Twitter account:

Immersion coolers on the way to Anchor I Solar in El Salvador. Anchor Hydro I in operation, II incoming. Soon we will launch the educational project with which my team will explain how immersion cooling is the future of hashrate decentralization and much more.

Josué López, investor from El Salvador.

In any case, Many Salvadorans oppose this industry in the belief that it is extremely harmful to the environment.. A group of environmentalists and residents of Chalatenango issued a statement expressing their opposition to the work.

Another Latin American country that was among the news these days was Argentina. “Why is Argentina an attractive country for Bitcoin miners?”, was the title of one of the articles recently published by CriptoNoticias.

There it is explained that there are two factors that favor the investment of mining companies in the southern country. One of them is that the price of electricity does not usually increase too much during the winter. The other is that the exchange rate between the national currency and dollarsis beneficial to any industry that produces profits quoted in US currency.

For these reasons, the Canadian company Bitfarms advances in the construction of a large Bitcoin mining farm in the province of Córdobalocated in the center of Argentina.

The Environmental Impact of Bitcoin Mining

The Ecological Arguments Against Bitcoin Mining Remain Strong. Given this, more and more companies are looking for sustainable solutions for the large energy expenditure of this industry.

Days ago, Bitmain donated $1 million to Hong Kong Polytechnic University. The objective of this donation was to advance projects that allow knowing the “underlying benefits” of Bitcoin mining, projecting towards mining with zero emissions and renewable energies.

There are many who project that, increasingly, Bitcoin mining will be an activity not only with less environmental impact, but even beneficial for the planet. Texas Senator Ted Cruz thinks so. This is so because it is an industry that can easily use energy waste (methane gas, for example) to sustain itself. With Bitcoin mining, these wastes are prevented from being released into the atmosphere in their entirety.

According to a study by research firm Arcane Research, Bitcoin mining will consume 10 times more energy by 2040. If it is carried out with renewable energies and with waste from other industries, then, the greater the energy consumption by mining, the greater the benefit for the environment.

Ethereum mining is coming to an end

Not only Bitcoin miners live. Ethereum is the favorite network of many, since it allows the use of video cards (GPU) to “extract” its native cryptocurrency, ether (ETH).

But this is coming to an end. As CriptoNoticias reported yesterday, between September 10 and 20 the Merge will take place. This is the abandonment of Proof-of-Work (PoW) mining to be replaced by Proof-of-Stake (PoS) staking.

Noti Hash: Bitcoin mining is growing and Ethereum awaits the Merge
Between September 10 and 20, the Ethereum Merge will take place. Font: Ethereum Foundation.

Ethereum miners, faced with such a situation, are already thinking of new directions to carry out their activity. There are other networks that can be mined with GPU, one of them is Ethereum Classic. 2 days ago, this blockchain reached an all-time high hashrate. The figure, which reached 37.76 TH/s, reflected an increase of approximately 27% compared to the previous week.

There are other cryptocurrencies that can be GPU mined, for example Ravencoin. But so far Ethereum Classic is presented as the clear winner, which is receiving mostly miners from Ethereum. Exactly a month ago, the co-creator of Ethereum, Vitalik Buterin, had said: “if you like PoW, migrate to Ethereum Classic, which is a good chain”.

Picture of the Week

The company Mecobit Photo Voltaic launched a portable photovoltaic power station. The product it can be used, among other things, for GPU cryptocurrency mining. Keep in mind that the mining power it allows is extremely low.

Noti Hash: Bitcoin mining is growing and Ethereum awaits the Merge
The Mecobit photovoltaic station is specifically designed for Bitcoin and cryptocurrency miners. Font: PRNewswire.

Learn more about Bitcoin mining in our Cryptopedia

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