The government of Kosovo has ceased crypto mining in the country owing to power constraints during the winter season.
Kosovo’s minister of Economy, Artane Rizvanolli, has decided to stop crypto mining following a recommendation from the Technical Committee on “Emergency Measures for Energy Supply,” according to a report by local outlet Gazeta Express.
The report notes that the government made the decision after Kosovo’s power supply fell below the stipulated level, and it began to impose electricity cuts during peak usage periods.
According to Rizvanolli, the government decided to establish a technical committee to evaluate emergency energy supply strategies in response to the situation. Based on the committee’s recommendations last week, the government decided to take emergency measures, including halting crypto mining throughout Kosovo’s borders.
The report noted that law enforcement agencies are set to step in to halt the production of crypto currencies, and work to identify locations where such operations take place. The minister said:
“These actions are aimed at addressing potential unexpected or long term lack of electricity production capacities, capacities of transmission or distribution of energy in order to overcome the energy crisis without further burdening the citizens of the Republic of Kosovo.”
As a consequence of low domestic production and exorbitant energy import charges, Kosovo’s energy distribution firm KEDS announced that power outages would be implemented across the country on Dec. 22. Bitcoin mining is known to consume a lot of power, with one recent report claiming that Bitcoin consumes eight times more energy than Google and Facebook combined.
In recent months, several nations have expressed concern about mining-related power outages, including Iran and Kazakhstan.
Related:Iran pauses electricity exports due to crypto mining and hot summer
Meanwhile, following the capitulation of Chinese miners triggered by the country’s crypto ban announced in September, retail cryptocurrency mining in Thailand appears to be flourishing. As reported by Cointelegraph, Thai entrepreneurs and cryptocurrency enterprises have been taking advantage of Chinese miners’ getting rid of their mining equipment.
New York-based crypto-mining service provider Foundry USA takes the lead to become the world’s second-largest Bitcoin (BTC) mining pool after taking up a 15.42% share of the network.
Data from BTC.com shows that Digital Currency Group-owned Foundry USA stands behind the pool leader AntPool by a hash rate of just 4,000 PH/s, which contributed to a 17.76% network share at the time of writing.
The rise in the participation of American entities can be attributed to China’s recent blanket ban on crypto trading and mining activities. The ban forced a large-scale migration of local Bitcoin miners, who now reside in crypto-friendly jurisdictions including the United States, Russia, and Kazakhstan.
According to https://t.co/1YRYr4QCmY, DCG’s mining pool Foundry has become the second largest Bitcoin mining pool. China’s severe crackdown on Bitcoin mining and the transfer of mining industry to the United States are the core reasons. https://t.co/VjtWgD9Hsp pic.twitter.com/XK9Y19QDrg
— Wu Blockchain (@WuBlockchain) November 20, 2021
Out of the top five mining pools in terms of hash rate distribution, Foundry USA charges the highest average transaction fees of 0.09418116 BTC (nearly $5,500) per block. American businesses have also picked up China’s slack in terms of crypto ATM distribution.
Coin ATM Radar data shows that Georgia-based Bitcoin Depot has overtaken its Chinese counterparts to become the world’s biggest crypto ATM operator. Interestingly enough, a majority of the crypto ATM operators are run by American companies, a trend more prominent after China’s proactive ban on crypto activities.
Despite the clear intent to pursue an in-house central bank digital currency (CBDC), the Chinese Communist Party has also sought public opinion on the Bitcoin mining ban on Oct. 21, which has sparked conversations around the amendment of the government’s negative stance on Bitcoin and cryptocurrency mining activities.
However, Statista’s data confirms that China’s contribution to the Bitcoin mining hash rate has been on a steady decline since September 2019. Two decades ago, China represented over 75% of Bitcoin’s mining hash rate, which by April 2021 reduced to 46% prior to banning cryptocurrencies.
Related:US lawmakers introduce bill to ‘fix’ crypto reporting requirement from infrastructure law
As the United States inches towards Bitcoin’s mainstream adoption, the regulators seek clarity in relation to the new reporting requirements put forth by the Biden administration.
Members of the Republic and Democratic party have appealed, in different occasions, to amend the crypto tax reporting reforms along with a plea to redefine the word “broker” in crypto transactions.
Starting from 2024, the bipartisan infrastructure bill requires the general public to declare digital asset transactions worth more than $10,000 to the Internal Revenue Service. The bill currently considers miners and validators, hardware and software developers and protocol developers as brokers.
Although digital currencies have skyrocketed in value throughout the year, Nvidia has not made any significant profits from its cryptocurrency mining processor (CMP) line.
According to Nvidia’s third fiscal quarter report, the company’s CMP sales dropped by 60% sequentially in the most recent quarter, with sales of the product line expected to drop even further in the fourth quarter.
In its quarterly financial statement, Nvidia said CMP sales fell from $266 million in the second quarter to $105 million in Q3, which ended in October.
Nvidia claims to have made $526 million in revenue throughout the product’s existence, roughly 3% of the total revenue of $19.27 billion over the same period. The company’s overall income has been driven almost entirely by gaming, data center and professional visualization equipment sales.
Last quarter was no different in terms of CMP sales income. As reported by Cointelegraph, Nvidia surpassed Wall Street expectations by generating over $6.5 billion in profit. Still, it failed to meet its crypto-mining GPU line profitability target for the second quarter of 2021.
During the first-quarter earnings call, Nvidia CFO Colette Kress predicted a $400 million revenue for the company’s cryptocurrency mining processor line in Q2. In the second quarter, Nvidia sold CMPs worth $266 million, short of its goal by a one-third margin.
Related: Influx of crypto miners to Kazakhstan reportedly strains energy supply
While CMP has yet to gain significant traction, Nvidia’s profits have not been harmed. Its value is up almost 123% this year. Overall sales were up 50% year over year, and $3.2 billion was generated in a single quarter by selling graphics cards to gamers and PC builders, according to the company’s earnings release on Wednesday.
Still, the firm claims it can’t be certain that its increasing sales of graphics cards aren’t linked to the cryptocurrency market. During a call with analysts on Wednesday, Kress said that: “Our GPUs are capable of crypto mining, though we don’t have visibility into how much this impacts our overall GPU demand.”
Sri Lanka joins the global crypto adoption drive after setting up a committee for exploring and implementing blockchain and crypto mining technologies.
A letter shared on Oct. 8 by Sri Lanka’s Director General of Government Information, Mohan Samaranayake, shows that the authorities have approved a recent proposal that aims to attract investments in the country’s blockchain and cryptocurrency initiatives.
According to Samaranayake, the Sri Lankan authorities have identified the need of developing “an integrated system of digital banking, blockchain and cryptocurrency mining technology” as a means to stay on par with global partners and international markets. He added:
“This committee will be mandated to study the regulations and initiatives of other countries such as Dubai, Malaysia, Philippines, EU and Singapore etc, and propose a suitable framework for Sri Lanka.”
The proposal was made by Namal Rajapaksa, Minister of Project Coordinating and Monitoring, which requires the committee to report its crypto and blockchain-related findings to the Cabinet of Acts, Rules and Regulations.
Out of the eight members in the committee, two members represent international fintech giants including Mastercard’s Sandun Hapugoda and PricewaterhouseCoopers’ (PwC) Sujeewa Mudalige. Members from traditional finance include Colombo Stock Exchange CEO Rajeeva Bandaranaike and the Central Bank of Sri Lanka Director Dharmasri Kumarathunge.
The remaining four members represent various national authorities including Sri Lanka Computer Emergency Readiness Team (SLCERT), Department Of Government Information, Information and Communication Technology Agency (ICTA) and the President’s Council.
Supporting this initiative, the committee will also monitor laws and regulations implemented by other nations to establish rules against Anti-Money Laundering (AML), terror financing and criminal activities.
Related: Crypto transactions surge 706% in Asia as institutional adoption grows — Chainalysis
A recent Cointelegraph report highlighted a 706% surge in Central and Southern Asia and Oceania between July 2020 and June 2021. Based on data shared by Chainalysis, the value of the transactions in the region amounted to 14% ($572.5 billion), with India representing the highest global transaction value.
Back in April, Sri Lanka’s central bank issued a public notice against the risks associated with cryptocurrency investments, citing a lack of legal or regulatory recourse. However, just a month after the notice, the central bank shortlisted three banks for developing a proof-of-concept for a shared Know Your Customer facility using blockchain.
Russian cybersecurity firm Kaspersky has detected more than 1,500 fraudulent entities targeting potential crypto investors and miners just in the first half of 2021.
Kaspersky’s research shows that 0.60% of users from South African countries have already been targeted by malicious crypto miners. The report also suggests that the most common methods of duping unwary users involved false advertisements claiming to sell mining equipment and fake websites posing as crypto exchanges. Bethwel Opil, Africa’s enterprise sales manager at Kaspersky, said:
Kasperskly’s data based on anonymised statistics revealed that 0.85% of crypto investors from Kenya and 0.71% Nigerians were targets of crypto-miner malware, while investors from Ethiopia (3.68%) and Rwanda (3.22%) faced the most number of threats in this regard. Bethwel Opil, Africa’s enterprise sales manager at Kaspersky, warned that the low percentages do not mean that the threat is insignificant:
“Crypto-miner malware has been identified as one of the top 3 malware families rife in South Africa, Kenya and Nigeria at present, which we believe emphasises that as cryptocurrency continues to gain momentum, more users will likely be targeted.”
The report also suggests that the most common methods of duping unwary crypto investors involved false advertisements claiming to sell mining equipment and fake websites posing as crypto exchanges.
These fraudulent platforms required users to make an upfront payment under the pretext of advanced payment or verification, after which the scammers stop responding. Cybercriminals also make use of phishing platforms to gain access to user’s private keys of their crypto wallets. Alexey Marchenko, Kaspersky’s head of content filtering methods development, said:
“Both those who want to invest or mine cryptocurrency and simply the holders of such funds can find themselves on the fraudsters’ radar.”
Related:South Africa to revise national policy position on cryptocurrency
Back in June 2021, South Africa’s Intergovernmental Fintech Working Group (IFWG) established a roadmap for defining the continent’s regulatory framework for handling crypto assets.
IFWG also highlighted the inherent risk and volatility of investing in cryptocurrency and shared 25 regulatory recommendations against Anti-Money Laundering, terror financing and market manipulation.
Iran’s Ministry of Industry, Mine and Trade reportedly dismissed claims by leading power company Tavanir that blamed illegal cryptocurrency miners for the ongoing power shortages in the country.
According to a report by the Financial Tribune, Alireza Hadi, the ministry’s director of investment and planning, said that the figures announced by Tavanir “seem to be highly exaggerated.” Hadi questioned Tavanir’s claims that illegal mining activities consume 2,000 megawatts of power. “This amount would equal power used by 3 million pieces of hardware,” he said.
While mining cryptocurrency has been legalized by the Iranian government, Tavanir blames unregistered miners for nationwide power shortages. In August 2021, Tavanir spokesperson Rajabi Mashhadi said:
“Unauthorized miners are the main culprits behind the power outages in recent months. We would have had 80% less blackouts if miners had halted their activities.”
Tavanir also claims to have shut down operations for over 5,000 mining farms in addition to confiscating 213,000 unauthorized mining hardware that was capable of consuming 850 megawatts.
To date, Iran’s Ministry of Industry, Mine and Trade has authorized 56 mining farms that collectively consume 400 megawatts, according to Tanavir’s estimate. In 2020, the ministry authorized and registered 126,000 pieces of mining equipment, which consumed 195 megawatts when running at full capacity.
Related:The Iranian government took down over a thousand crypto mining farms
Last year, whistleblowers helped Tavanir close down 1,100 crypto mining farms that allegedly did not have proper licenses.
Iranian citizens who help the authorities track down illegal miners were awarded 100 million rials ($480) as a bounty. Although Iran has approved registered businesses to conduct mining operations, authorities had warned crypto miners to register their business and equipment before the end of 2020.
The team behind mining software NBMiner claim to have partially cracked Nvidia’s anti-mining limitations.
Back in June Nvidia implemented an algorithm called Lite Hash Rate, or LHR, on all graphics cards from its RTX 30 series in an attempt to curb crypto mining. The limiter works on both the BIOS and driver level detecting mining algorithms and drastically reducing its mining power by up to 50% of its original capability.
At the time, the company claimed that miners were disrupting its supply chain, consequently increasing the price of its graphics cards due to low supply. Nvidia prioritized its gaming user base stating that: “… this additional step will get more GeForce cards at better prices into the hands of gamers everywhere.”
NBMiner’s most recent release has reportedly been able to bypass these limitations and increase the mining power of these graphic cards by up to 70%. The update is available on both Windows and Linux terminals and supports backup mining pool configuration. While the software is free to download, miners are required to pay the team a development fee ranging from 1% to 3% of their mining revenues.
The NB team has been developing methods to increase graphic cards performance for years and promised to develop further improvements in the future. It may not matter much, once Ethereum 2.0’s much anticipated Proof-of-Stake algorithm kicks in.
Bitcoin’s (BTC) rapid recovery above $46,000 has renewed calls for a $100,000 BTC price by the end of 2021, while the effects of China’s crackdown on the mining industry are slowly beginning to fade as the Bitcoin network hash rate shows signs of recovery.
One of the side benefits of China’s crackdown is that it has lowered the barriers of entry into the Bitcoin mining space, which has been shown to provide profits in both bull and bear markets.
Bitcoin mining is one of the few ways that investors can acquire BTC without directly purchasing it from the market, and is quickly becoming an industry dominated by big money interests that can afford the electricity costs and upkeep required to run a mining operation.
Here are some options available for the average crypto stacker to acquire more BTC through cloud mining contracts, crypto lending platforms and centralized exchanges (CEX).
Cloud mining contracts
The cloud mining industry has been around since Bitcoin’s early days, and it offers those interested in mining Bitcoin who lack the space, equipment and electricity required an opportunity to outsource their production.
Some of the more well-known companies that offered cloud mining services include Genesis Mining and HashNest, but demand for their services has exceeded their capabilities, resulting in all their Bitcoin mining contracts being sold out.
One of the current mining operators with available contracts is Shamining, a company based in the United Kingdom that has been in operation since 2018, and claims to have data centers worldwide with locations in California, Mexico, Cape Town, South Africa and London, England.
Through this service, users can rent mining equipment and pay for the associated costs of operating the units, while the company handles the physical housing, operation and maintenance. Once operational, generated proceeds can be withdrawn to a Bitcoin wallet specified by the user.
Current rental contracts include two options for GPU miners, which cost around $283 for 23,580 gigahashes per second (GH/s) or $1,066 for 94,340 GH/s, and another option for ASIC miners with a current cost of $2,571 for 235,849 GH/s of mining power.
All contracts indicate that they have profitability that starts at 143%.
Another option that allows users more flexibility regarding the parameters of their mining contract is ECOS, a company that grew out of the Free Economic Zone located in Hrazdan, Armenia, and has been in operation since 2017.
As seen in the graphic above, a 50-month contract for 9 terahashes per second currently costs $1,668 and is projected to result in a profit of 272.82% at a BTC price of $70,000.
It should be noted that all cloud mining services offer warnings about the high risks involved and that no level of profit can be guaranteed. This could be due to a variety of circumstances, including fluctuating electricity prices, Bitcoin price volatility and advances in mining technology that lead to substantial increases in mining difficulty, which renders older equipment obsolete.
Related:Bitcoin mining difficulty jumps a second time as miners settle offshore
Crypto lending services
A more traditional option available for hodlers to acquire more Bitcoin by utilizing their current stack that doesn’t require any further investment, like mining, is through lending services that offer a yield on deposits.
Nexo and Celsius are two of the most well-known lending platforms that allow cryptocurrency users to borrow funds against their crypto holdings or earn rewards for deposits.
At the time of writing, Celsius offers users an annual percentage yield (APY) of 6.2% for Bitcoin deposits, and Nexo offers a standard return of 5% on flexible-term deposits, while fixed-term deposits that go a minimum of one month can earn 6%.
A third option that provides users with a 4% return on BTC deposits is BlockFi, a crypto asset service provider that offers interest accounts and crypto-backed loans and has also recently launched a Bitcoin rewards credit card.
Related:What bear market? Investors throw record cash behind blockchain firms in 2021
Earn BTC from centralized exchanges
Several centralized exchanges also offer Bitcoin holders a return on their BTC deposits, albeit at lower rates than those mentioned above.
Binance, the largest CEX in the crypto ecosystem, offers users an estimated APY of 0.5%, while third-ranked exchange Huobi offers 1.32%.
The best yield offered on a United States-based CEX can be found on Gemini where users can earn 1.65% on their deposits.
KuCoin offers a more free-market approach to BTC lending where lenders can set the parameters of the loan terms, choosing between contract lengths of seven days, 14 days and 28 days while getting to set their own daily interest rates to compete with other lenders on the market.
The lowest rate currently offered on KuCoin is an annual rate of 1.82% on a seven-day contract.
As seen in the data provided, there are multiple ways to increase a Bitcoin stack as opposed to simply buying on the open market, but they are becoming scarcer as time progresses.
With large institutions, energy companies and governments beginning to develop Bitcoin mining infrastructures, smaller market participants are increasingly being squeezed out as cloud mining facilities are unable to keep pace with demand.
Bitcoin lending is increasingly looking like the main way BTC holders will be able to earn a yield paid in BTC in the future, while Bitcoin-backed loans offer a way for hodlers to access the value of their tokens without the need to sell and create a taxable event.
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The 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.
Blockcap, one of North America’s fastest-growing Bitcoin (BTC) mining companies, has secured sizable investments from some of crypto’s biggest names, setting the stage for significant expansion in the year ahead.
Off The Chain Capital and Foundry Digital, a subsidiary of Digital Currency Group, contributed to the $75 million haul, Blockcap announced Wednesday. The funding will go towards scaling the company’s mining operations and promoting the continued growth of digital assets in the United States.
Blockcap was founded in 2020 by a group of blockchain veterans. It now commands a fleet of roughly 12,000 machines mining roughly 7 BTC per day. That figure is expected to grow to more than 30,000 by the end of the year, helping the company expand its hashing power to more than 3.5 EH/s. As Cointelegraph previously reported, Blockcap estimates that its mining hardware is valued at $270 million on secondary markets.
Currently, Blockcap accounts for nearly 1% of all Bitcoin network transactions, the company said Wednesday.
Mike Colyer, Foundry Digital’s CEO, said his firm sees “opportunity for long-term growth in Blockcap.”
Biran Estes, Off The Chain’s chief investment officer, said Blockcap’s acquisition of tens of thousands of miners demonstrates “just how massive Blockcap has become.” He explained:
“Mining is the critical infrastructure necessary to ensure the ecosystem progresses and we believe that Blockcap will continue to catalyze the growth of digital assets in cyberspace.”
In addition to expanding its mining operations, Blockcap is looking to promote mainstream adoption of blockhain technology, especially in the United States. Darin Feinstein, Blockcap’s executive chairman, said:
“We’re excited for what is in store for digital asset mining here, especially the associated benefits of economic growth and job creation.”
China continues to lead the Bitcoin mining industry, though its dominance appears to be smaller than initially believed. As of July 2020, the Asian superpower probably accounted for roughly half of the global Bitcoin mining industry — not 65% as many believed. At the time, 14% of mining capacity came from the United States.