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How 2021 Become One Of The Most Surprising, Formative Years In Bitcoin Mining
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Tag: Hash Rate
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Bitcoin records all-time high network difficulty amid price fluctuations
Data from BTC.com estimates that the network will continue to grow stronger by attaining another ATH in the next 12 days — with a network difficulty of 26.70 trillion.
Bitcoin hash rate jumps to ATH as Jack Dorsey confirms Block’s mining system
Bitcoin (BTC) hash rate has returned to all-time highs despite losing a key hash rate contributor. Meanwhile, amid lackluster price action, Block CEO Jack Dorsey confirmed the creation of an open Bitcoin mining system.
The BTC space continues to surprise and bewilder critics and fanatics alike. Kazakhstan, the network’s second most important BTC mining country, experienced an internet blackout last week due to civil unrest. However, the hash rate faltered no more than 13.4% before regathering to reach all-time highs.
As shown in the below data from Glassnode, with the price checking into the $42,000 range yesterday, the mean hash rate hit 215 million terahash per second.
Bitcoin miners continue to show resilience and as Fidelity Digital Assets observed, the network is even “more widely distributed around the world.”
Cointelegraph previously reported that Block would develop open-source Bitcoin mining systems in 2022 due to job postings on Linkedin. Yesterday, Jack Dorsey confirmed the hunch, retweeting comments made by Thomas Templeton, a general manager at Block.
In the Twitter thread, Templeton addressed issues relating to the availability, reliability, performance, and products pertaining to BTC mining. In sum, Block’s goals for BTC mining are the following:
“We want to make mining more distributed and efficient in every way, from buying, to set up, to maintenance, to mining. We’re interested because mining goes far beyond creating new bitcoin. We see it as a long-term need for a future that is fully decentralized and permissionless.”
Related: Jack Dorsey announces Bitcoin Legal Defense Fund
Building a BTC mining system “out in the open” and alongside the community is no mean feat. Econoalchemist, an established home BTC miner and BTC magazine contributor, tweeted that developing products in open source would “build trust where no reputation exists currently and also might shift consumer expectations in that direction.”
Ultimately, Block’s mining solutions may pave the way for more DIY miners to enter the space.
It seems the sky’s the limit for the hash rate. Well, at least until the next 2016 blocks when the network difficulty resets.
Spanish lawmaker sees opportunity amid Kazakhstan’s Bitcoin mining collapse
Deputy for the Spanish Ciudadanos political party María Muñoz has proposed a bill to make Spain a Bitcoin mining hotspot following the internet shutdown that caused a mining outage in Kazakhstan.
The lawyer and economist Muñoz was steadfast in her support of Spain as a Bitcoin (BTC) destination, in a tweet on Friday:
“The protests in Kazakhstan have repercussions all around the world but also for Bitcoin. We propose that Spain positions itself as a safe destination for investments in cryptocurrencies to develop a flexible, efficient and safe sector.”
A two-page open letter accompanied the tweet directed at the Spanish Congress of Deputies. First, Muñoz highlighted the significance of the protests and the government’s response which used “all the strength of the police and the army,” before the government switched off the internet to the largest Central Asian economy.
She cited a Cambridge Centre for Alternative Finance study that put Kazakhstan as the second-largest Bitcoin miner worldwide, contributing an estimated 20% of the hash rate in the second half of 2021. The government’s decision to effectively pull the rug out from under Kazakhstan’s Bitcoin miners caused the hash rate to plummet a reported 13.4%.
These events inspired pertinent questions for the pro-Bitcoin lawmaker:
- What information does the Spanish government have on the impact of the Kazakhstan internet blackout on the Spanish crypto mining industry?
- Will the government take measures to attract investors and miners fleeing the Kazakhstan mining industry?
- What data does the government have regarding the energy efficiency of Bitcoin and the growth of the mining industry?
A proven proponent for the Bitcoin network, her party Ciudadanos, or “Citizens,” proposed a national strategy on cryptocurrencies in October last year. Her party seeks to position Spain as a pole for investments into cryptocurrencies from the European Union and the world — and Bitcoin mining could be the catalyst.
As Bitcoin hash rate fluctuations have shown time and again, mining infrastructure is not geographically restricted. China’s mining ban, for example, was to the benefit of Kazakhstan and Kosovo.
Alan Konevsky, chief legal officer at PrimeBlock, explained last year’s mining changes to Cointelegraph: “Mining companies including those that relocated after the China regulatory changes, set up in countries like Kazakhstan and Kosovo because the cost of electricity is much cheaper than in North America.”
This was shown in Kazakhstan’s growing hash rate in 2021. However, in a premonition to what could take place in Spain, Konevsky goes on to explain:
“If mining becomes a complete non-starter in these countries, we could see miners relocate. This industry is mobile, to a point — but as it matures it requires stability, including stable political climate and stable inputs, including energy.”
Muñoz hopes that Spain harbors these Bitcoin-friendly factors. However, one of BTC’s biggest headwinds may be political. Her tweet inspired ridicule from rival Green party member Ernest Urtasun, a European Parliament member.
Labeling her proposal a “bad joke” in a tweet, he said BTC mining is “an environmental aberration.” Muñoz and her Citizens party clearly have their work cut out.
Why China’s Ban Was The Best Thing For Bitcoin In 2021
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How The Geopolitics Of 2021 Will Shape The Year Ahead For Bitcoin
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Top Bitcoin mining country Kazakhstan turns off internet amid protests
Kazakhstan, which boasts the second-largest (BTC) mining hash rate in the world, is experiencing major internet disruptions amid local anti-government protests.
Network data provider NetBlocks reported Wednesday that Kazakhstan was “in the midst of a nation-scale internet blackout after a day of mobile internet disruptions and partial restrictions.” According to the data, the normalized network connectivity in Kazakhstan fell to 2% on Jan. 5.
“The incident is likely to severely limit coverage of escalating anti-government protests,” NetBlocks noted.
Kazakhtelecom, the largest telecom company in Kazakhstan, has shut down the internet across the nation, according to some reports. Cellular networks have reportedly also been disabled in some cities in Almaty.
Kazakhstan’s ongoing internet outage comes after the Kazakhstan government resigned amid protests that were sparked over a sharp rise in fuel prices. President Kassym-Jomart Tokayev sacked Kazakhstan’s government early on Wednesday and declared a state of emergency in Almaty and the surrounding province.
According to some analysts, the protests are also a response to the lack of democracy in the country. “Young, internet savvy Kazakhs, especially in Almaty, likely want similar freedoms as Ukrainians, Georgians, Moldovans, Kyrgyz, and Armenians, who have also vented their frustrations over the years with authoritarian regimes,” Tim Ash, emerging market strategist at BlueBay Asset Management said.
The protests have taken a violent turn, with reports of sustained gunfire between protestors and state security organs including the police and the national guard.
Heavy and continuous gunfire in #Kazakhstan today. pic.twitter.com/nraG3ZySnf
— Jake Hanrahan (@Jake_Hanrahan) January 5, 2022
Related: Bitcoin mining manufacturer Canaan expands footprint in Kazakhstan
The latest internet outages could affect the global Bitcoin hash rate. As previously reported by Cointelegraph, Kazakhstan accounted for 18% of the total global BTC mining hash rate distribution as of October 2021, second only to the United States.
Many Chinese Bitcoin mining companies and miners were increasingly relocating their services in Kazakhstan after the Chinese government announced a renewed ban on the crypto industry in September 2021.
As Bitcoin Turns 13, The Network Is More Secure Than Ever
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Bitcoin mining manufacturer Canaan expands footprint in Kazakhstan
Bitcoin (BTC) mining hardware manufacturer Canaan Inc is expanding its footprint in Kazakhstan after signing new strategic partnerships with multiple crypto mining firms in the country.
The Nasdaq-listed company announced Tuesday that it had deployed 10,300 AvalonMiner units in Kazakhstan as of Dec. 31, 2021, finalizing phase one of its deployment in the central Asian country. Canaan is partnering with local firms as part of its business expansion plans outside of China. However, the company declined to list any of its local partners.
Although Canaan is based in Hangzhou, China, the company is eyeing expansion outside of its home country following Beijing’s wholesale crackdown on crypto mining in 2021. Zhang Nangeng, Canaan’s CEO, spoke out against the mining ban during an earnings call in July, telling investors that crypto miners make better use of stranded electricity and contribute positively to employment and the local economy.
With China snuffing out the crypto mining industry, neighboring Kazakhstan has rushed to fill the void, offering displaced miners cheap and plentiful coal. By June 2021, the world’s fifth-largest mining pool had set up shop in Kazakhstan. The following month, Kazakhstan accounted for nearly a fifth of the world’s Bitcoin mining output.
Related: Kazakhstan to decide whether to launch CBDC by late 2022
China’s ban on Bitcoin mining resulted in a sharp drop in network hash rate, but that has quickly reversed after displaced miners established new bases of operations. Following a six-month recovery, the Bitcoin network’s hash rate reached a new all-time high on Jan. 2.
#Bitcoin hash-rate smashed a new all-time high yesterday! pic.twitter.com/TzEGE3sNRF
— Bitcoin Archive (@BTC_Archive) January 3, 2022
As for Canaan, the company recorded stellar growth in 2021, with net revenues hitting post-IPO highs. The company’s net revenues totaled $204.5 million in the third quarter, up 708.2% over the same period a year earlier, according to unaudited financial results that were posted in November.
Bitcoin network turns 13, celebrates with new hash rate all-time high
Today marks the 13th year since Bitcoin (BTC) creator Satoshi Nakamoto mined the genesis block or block 0 of the Bitcoin network, and for the first time mined a reward of 50 BTC back on Mon, 2009. Fast-forward to 2022, the BTC network shows no signs of slowing down by reaching a new all-time high hash rate of 207.53 million tera hashes per second (TH/s).
The Bitcoin hash rate, which correlates to the strength of the network based on the number of active miners, saw a temporary downfall after China banned citizens and businesses from pursuing crypto mining and trading activities. As a direct result of China’s blanket ban on crypto a sudden shortage of miners, the Bitcoin hash rate fell to 58.46 million TH/s.
As evidenced by the above graph, the Bitcoin hash rate saw an eventual comeback as Chinese miners began migrating to friendly jurisdictions. On Jan. 1, 2022, the Bitcoin network recorded a new all-time high of 207.53 million TH/s, reclaiming the network’s security by increasing the mining difficulty.
At the time of writing, the Bitcoin network hash rate stands at 190.64 million TH/s, down 8.14% from its all-time high.
Related: Bitcoin holdings of public companies have surged in 2021
BTC holdings of private corporations have significantly increased in the previous year, as revealed by on-chain analyst Willy Woo.
Since MicroStrategy’s “Bitcoin for Corporations” conference in Feb 2021, public companies* holding significant BTC have gained market share from spot ETFs** as a way to access BTC exposure on public equity markets.
* MicroStrategy & public mining companies
** Mainly Grayscale pic.twitter.com/e18OEfgiEW
— Willy Woo (@woonomic) January 2, 2022
A Cointelegraph report on the matter highlights that purchases made by Michael Saylor’s MicroStrategy exceed $6 billion in crypto assets. In December alone, the firm purchased a further 1,914 BTC worth $94 million.