Bitcoin Miners

Number of Busted Illegal Crypto Mining Farms in Iran Nears 7,000

14/05/2022 by Idelto Editor

Authorities in Iran have shut down close to 7,000 unauthorized facilities for cryptocurrency mining in the past two years, local media revealed. According to a report, most of the illegal bitcoin farms were concentrated in five provinces of the Islamic Republic, including Tehran.

Iran Continues Crackdown on Unlicensed Cryptocurrency Mining

Iranian officials have unplugged and disbanded a total of 6,914 crypto farms operating without a mining license. This since authorities started clamping down on the illegal extraction of cryptocurrencies in 2020, the English-language Iranian daily Financial Tribune unveiled this week.

The newspaper quotes a report by Iribnews.ir, which details that these facilities have burned some 645 megawatts of electrical power while minting digital currencies without permission. It has been estimated this equals the annual consumption of three major regions — North Khorasan, South Khorasan, and Chaharmahal-Bakhtiari.

Cryptocurrency mining has been a legal industrial activity in Iran for almost three years now, after the government approved regulations for the sector in July 2019. A licensing regime was introduced and companies that want to get involved in the business need to obtain authorization from the Ministry of Industries.

However, as registered crypto miners are required to buy the electrical energy they need at higher, export rates, many Iranian miners have opted to remain under the radar. They usually connect illegally to the grid and use subsidized electricity to power their mining hardware.

Iran’s Power Generation, Distribution, and Transmission Company (Tavanir) has been going after underground crypto farms, closing them down and confiscating hundreds of thousands of mining machines. If identified, their operators can be fined for damages inflicted on the distribution network and a report revealed last month that the government is preparing to increase the penalties.

The country’s electricity shortages last summer were partially blamed on increased electricity usage for coin minting and even licensed miners were asked to shut down their equipment. They were allowed to resume operations in September but then again ordered to suspend activities in the face of a growing power deficit in the cold winter months.

Do you expect Iran to continue to crack down on unlicensed crypto mining? Tell us in the comments section below.

Fort Worth, Texas Set To Vote On A Bitcoin Mining Bill Tomorrow

25/04/2022 by Idelto Editor

Tomorrow, legislators of Fort Worth, Texas will vote on a bill for bitcoin mining while the City Council will receive three miners from the Texas Blockchain Council.

Fort Worth will vote on a bill intended to strengthen the bitcoin mining industry of Texas tomorrow.
The Texas Blockchain Council is set to donate three bitcoin miners to the City Council.
The donation will signal the start of a 6-month trial period in which the City Council of Fort Worth will begin mining bitcoin.

Fort Worth, Texas is set to vote on a bill that encourages bitcoin mining technology and sees the City Council receive three bitcoin miners donated from the Texas Blockchain Council, per a report from MSN.

The bill seeks to position Fort Worth as “crypto-friendly” and “welcoming to the industry.” The city also aims to lure in “businesses contributing to the development of this evolving technology,” according to the report.

The three bitcoin miners being donated are valued at $2,100 each and will be given to the City Council completely free for a six-month pilot period. The machines being donated were not specified in the report, but should the pilot program expire, the bitcoin miners are to be returned to the Texas Blockchain Council.

Earlier this year on February 8, the Texas Blockchain Council officially endorsed pro-bitcoin Governor Greg Abott of Texas for reelection.

Lee Bratcher, President of the Texas Blockchain Council said “Governor Abott understands that over regulation and increased taxation can cripple a growing economy. With his leadership, Texas can continue to be a destination for expanding companies, growing families, and 21st century innovation,” in the video release of the endorsement.

Bratcher continued to say “Governor Abott understands that the future of technology revolves around bitcoin and blockchain,” during the endorsement.

Governor Abbot has been a vocal supporter of the bitcoin industry. On June 4, 2021 Abbot signed a law creating a “master plan” for Texas to take advantage of the “booming” industry, as he stated in his video release.

Other legislators from Texas have also established clear lines of support for bitcoin such as Pete Sessions, a 12-term republican who stated “Bitcoin is aligned with American incentives and will strengthen the dollar.”

Senator Ted Cruz from Texas also announced a bitcoin purchase of up to $50,000 in a financial disclosure. Cruz has also been highly critical of legislation that seeks to damage the bitcoin mining industry.

Bitcoin’s Hashrate Surges Reaching a Lifetime High, Difficulty Expected to Jump Next Week

24/04/2022 by Idelto Editor

Bitcoin’s hashrate tapped a lifetime high this weekend reaching 271.19 exahash per second (EH/s) on Saturday, April 23 at block height 733,197. Currently, the computational power is coasting along at 233.81 EH/s with a network difficulty change expected three days from now on April 27.

Bitcoin’s Hashrate Records an All-Time High, Hashpower Increased 55% Higher Since January

The processing power that confirms transactions and secures the Bitcoin (BTC) network has reached an all-time high (ATH) on Saturday, April 23. The hashrate touched 271.19 EH/s, which is approximately 271,190 petahash per second (PH/s) or 271,190,000,000,000,000,000 hashes per second (H/s).

Bitcoin’s hashpower has never been higher than this point in history and since block height 717,696 or January 8, 2022, the hashrate’s record high is an increase of 55.48% since then. The processing power backing the Bitcoin network reached an ATH of 246 EH/s on February 12, prior to the all-time high recorded on Saturday.

Following a downward difficulty adjustment algorithm (DAA) change at block height 731,808, which saw the difficulty drop by 1.26%, the network is expected to see a DAA increase in roughly three days. Because the hashrate is running at such high speeds, the DAA is expected to increase by 3.21%.

If the estimated DAA increase of 3.21% comes to fruition, Bitcoin’s network difficulty will jump from the current 28.23 trillion to a lifetime high of 29.13 trillion. Presently, on Sunday afternoon (ET), a block subsidy reward worth 6.25 BTC is currently valued at $247,063 using today’s bitcoin exchange rates.

As Bitcoin’s hashpower tapped an ATH on Saturday, over the last three days, the top mining pool was Foundry USA capturing 22.55% of the global hashrate. Statistics show that Foundry’s 47.89 EH/s has allowed the pool to find 106 out of the past 470 blocks found by 13 pools. The second-largest bitcoin miner below Foundry USA was Binance Pool with 12.98% or 27.56 EH/s of hashpower.

While statistics show that bitcoin’s price has not had the best first quarter in 2022, the hashrate increasing by more than 55% since that time is quite the feat. Metrics indicate that BTC’s current value is profitable to mine using most ASIC devices with 25 TH/s or more. At press time, the Bitmain Antminer S19 Pro (110 TH/s) mining rig with $0.12 per kilowatt-hour in electrical costs will see an estimated profit of $10.23 per day.

What do you think about Bitcoin’s hashrate touching a lifetime high of 271 EH/s on Saturday? Let us know what you think about this subject in the comments section below.

The Energy System Benefits From Bitcoin Mining

16/04/2022 by Idelto Editor

Bitcoin strengthens the grid due to the incentivization of energy production. It supports the people who need electricity and miners as buyers of last resort.

Illiteracy is a peril of the trade for anyone working in the technology sector. New technologies tend to be met with resistance until they’re broadly understood, and sadly, policymakers and regulators are frequently guilty of the most egregious tech illiteracy — stopping innovation in its tracks while they play catch-up.

Every month there’s another facepalm-inducing moment. In January, it was the turn of Erik Thedéen, the vice-chair of the European Securities and Markets Authority, who used an interview with The Financial Times to call for an EU ban on all proof-of-work mining (the method by which new bitcoin is issued).

It’s the latest in a series of attacks on bitcoin mining by opponents who have failed to do their homework. Once you understand the role bitcoin mining plays in our current energy system, banning the practice starts to sound like a truly terrible idea.

It Isn’t The State’s Job To Dictate Energy Usage

Energy usage is synonymous with human flourishing, so it’s right that it’s a key focus for policymakers, such as Thedéen, looking to improve the lot of those they govern. However, in recent years the policy agenda has moved gradually away from finding ways to increase energy affordability and reliability, towards mitigating energy use. This latter position is fundamentally anti-humanist and comes at the price of improving human welfare by pushing energy prices up and down.

Furthermore, by attempting to dictate the precise terms of how people and companies should use energy, regulators and governments are being short-sighted, overlooking the value that innovative new technologies can offer. In fact, Bitcoin has a crucial role to play in enabling the transition toward renewable energy by mitigating many of the challenges that this transition presents.

The Transition To Renewables Isn’t Straightforward

There are three main measures for evaluating the usefulness of different energy sources: reliability, abundance and cost. While renewable energy might be the world’s preferred option from an environmental perspective, it doesn’t perform particularly well against any of these criteria.

Firstly, while renewable energy is abundant, its variably spread across the world and much easier to harness in some locations than others.

Secondly, it’s intermittent. Power grids require a base load and a power source that provides continuous power. Energy systems that over-rely on renewable energy veer from insufficient power to too much power. The latter causes problematic power surges on the grid; the former forces nations to reintroduce fossil fuels into the mix, and at short notice.

Finally, renewable energy receives massive government subsidies to operate. Over time, with continued technological innovation, the cost of production will likely decrease. But, for the foreseeable future, renewable energy just raises the cost of energy to the populace, both in terms of higher energy bills and higher taxes.

Bitcoin Mitigates Many Of The Problems With Renewables

As the world’s energy grids attempt to transition toward renewable energy, bitcoin mining has a crucial role to play in making such an effort viable. Renewables, like solar and wind are unreliable, expensive sources of energy, but as the sun shines and the wind blows intermittently, bitcoin mining improves power grid resilience by being able to absorb excess power caused whenever there’s excess renewable production. It also incentivises additional production of renewables, thus driving down their overall cost of manufacture.

Mining bitcoin is energy-intensive. There is no debating this. But it is misguided to claim that it is diverting energy from other more worthwhile uses, when in reality, it acts as the energy buyer of last resort, an on-demand solution for harnessing energy when there’s over-production. Without bitcoin mining the surplus energy is wasted, and unprofitable projects stay as such.

Furthermore, in the scenario where too little energy is being produced by the grid at large, or by renewable projects in general, bitcoin miners are one of the few demand generators able to quickly shut down operations to help the grid cope, as they most recently did in Texas when winter storms placed additional pressure on the system. In this way, bitcoin mining can act as a built-in buffer. What EU policymakers are failing to grasp is that, assuming we wish to have an electrical grid not prone to outages or surges caused by renewables, bitcoin mining is essential.

Not only that, but because bitcoin mining is a revenue generator, it has the potential to make previously unviable renewable energy projects profitable. For example, there are thousands of geothermal energy sources in remote locations, far away from the nearest population centre and thus undeveloped by energy companies. Bitcoin mining creates a clear financial rationale for investing in these energy sources, monetising the operation from the moment energy is first generated. Such an incentive to invest in, develop and bring down the long-term cost of renewable energy products has never before existed outside of direct government intervention.

Reversing An Unhelpful Narrative

It’s high time we changed policymaker perceptions about the value bitcoin is bringing to the table. Most states continue to view it with suspicion or outright disdain, with El Salvador being the exception. And while it’s understandable why a state or an economic bloc such as the EU might be afraid of a technology controlled by no one, to see influential regulators — whose role should be to ensure the proper functioning of markets perpetuating an incorrect understanding of their market and Bitcoin — is deeply concerning.

Bitcoin is a perfect and poetic illustration of why energy usage and human flourishing go hand-in-hand. Yes, bitcoin mining requires a lot of energy, but it also protects our energy system and incentivises investment in renewable energy. Moreover, it’s a great example of how intelligently-designed technology can perfectly align profitability with positive societal change — a point that policymakers would do well to comprehend.

This is a guest post by Alex Mann. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.

Two Years Later, Stimulus Check Investment Proves Value Of Bitcoin Mining

14/04/2022 by Idelto Editor

Two years since the U.S. sent COVID-19 stimulus checks to taxpayers, investment in bitcoin mining stocks has generated significant returns.

The two-year anniversary of the first of three coronavirus economic impact payments (aka, stimulus “stimmy” checks) deposited in U.S. taxpayers’ bank accounts came and went on April 11, and headlines about monetary inflation, possible economic recession and generally grim financial tailwinds are everywhere.

The ethos of Bitcoin stands diametrically opposed to the perceived reckless spending and money printing that characterized the past two years, specifically with Bitcoin miners tasked with issuing new units of bitcoin at predetermined, unmalleable intervals. So, at this point, perhaps it’s appropriate to look back on the returns that individuals who received stimulus checks would have enjoyed if they invested their dollars into bitcoin mining and the alternative financial world it supports.

Bitcoin’s Stimulus Check Narrative

Before parsing mining-specific data, it’s helpful to remember how quickly the narrative that supported investing stimulus money in bitcoin exploded across all social media channels before the first checks were signed or mailed. So large was the support for this meme that multiple polls were later conducted to quantify exactly how many Americans actually exchanged their free fiat money for bitcoin or other cryptocurrencies.

Coinbase, the largest U.S.-based bitcoin exchange by volume, fueled the fresh bitcoin by sharing data that showed a surge in stimulus-check-sized bitcoin buy orders on its platform as checks were being mailed.

Bitcoin’s capped and predictable supply acted as the perfect foil for the inflationary, unpredictable monetary policy being created in real time as a response to the coronavirus situation. The same month that the first checks were mailed, a Twitter account was created that tracked the dollar value of the first stimulus check ($1,200) if it was invested entirely into bitcoin. The account still tweets updates today.

But beyond bitcoin itself, what returns would stimulus check recipients have received if they spent their free money on mining stocks?

Mining Stock Price Performance

Dumping the stimulus dollars sent by the U.S. Treasury into bitcoin mining stocks would have returned a fairly handsome profit over the past two years. Through 2020 and 2021, Americans received three rounds of stimulus checks in April 2020, December 2020 and March 2021 that totaled $3,200.

The biggest question is, of course: What mining stocks to buy?

In the table below, peak and current values of what could be called a “stimulus check portfolio” are compared based on investments in one of a few leading public bitcoin mining companies (i.e., Bitfarms, Canaan, Hive, Hut 8, Marathon or Riot). At their peak, any of these investments was worth over $15,000, with a couple in or near six digits. But the stimulus portfolio’s current values are down along with bitcoin itself.

Peak and current “stimulus check portfolio” values vs. investments in leading public bitcoin mining companies

Perhaps some stimulus-check investors would have invested in a basket of mining stocks, instead of just one. But for simplicity’s sake, this article only considers investments in one of a few leading stocks. The line chart below visualizes the time series data for the issuance of each of three checks and the fluctuations in value for each of the companies included in the table above from April 2020 to the time of this writing.

Issuance of each stimulus check to U.S. taxpayers vs. value of public bitcoin mining companies

Even though most of these investments are sitting below their highs, their stimulus-check-funded investors sat on triple- and quadruple-digit percentage returns at different periods over the past two years. And to date, these investors are still heavily in the black on these orange coin stocks. Overall, not bad.

Why Mining Stocks?

Instead of just buying bitcoin, some investors prefer to also own mining stocks to get even more exposure to the bitcoin market and potentially outperform bitcoin itself. Mining stocks have a strong positive correlation to bitcoin’s price movement, which means when bitcoin and other top cryptocurrencies are in bullish trends, it’s not surprising to see market tailwinds boost prices for shares of public mining companies. And when bitcoin drops, mining stocks fall too.

But mining stocks are generally considered as a leveraged play on bitcoin, so when bitcoin goes up or down, mining share prices follow the same direction but with larger moves of their own. So, if a particular bitcoin investor is exuberantly bullish, buying mining stocks with the hopes of outperforming bitcoin itself is a reasonable strategy.

Besides using mining stocks to speculate on bitcoin, these investments also offer easy exposure to the mining industry. Mining is a very capital-intensive activity, and much of the industry’s processes and frameworks have yet to fully mature and be standardized. Bitcoin bulls who want exposure to this industry without the headaches of sourcing machines, building a mining site or maintaining the operation often opt to simply buy shares of mining companies.

Similarly, mining stocks also offer strongly-principled bitcoin investors an opportunity to diversify their portfolios and potentially outperform their primary investment (BTC) without allocating capital to alternative cryptocurrencies. Without derailing this article with the politics of altcoins, the primary goal of most active bitcoin investors is to find a way to outperform the price of BTC. Most altcoins characteristically do outperform bitcoin in dollar-denominated returns, but many bitcoin holders reject altcoin investments on principle, if nothing else. Mining stocks are bitcoin-centric investments that can outperform bitcoin in bullish market cycles without compromising the ideals of some bitcoin holders.

In short, where the price of bitcoin will go next isn’t always clear. But whatever direction it takes, mining stocks will almost certainly follow.

If You Invested Your Stimulus In Bitcoin Mining Stocks, You Aren’t Disappointed

For many Americans, the stimulus funds were spent on things arguably much more important than bitcoin mining stocks (e.g., rent payments, utility bills, groceries, emergency savings). But for other recipients who weren’t significantly affected by the economic turmoil following coronavirus response measures, the data visualized in this article shows the free money was an opportunity to invest in essential infrastructure supporting the Bitcoin network. And the short-term returns on these investments were not disappointing.

This is a guest post by Zack Voell. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.