Mining cryptocurrencies
The time when cryptocurrencies were mined using an ordinary computer has long passed - later huge farms began to do this. First of all, this lesson involves the consumption of a huge amount of electricity that computers use for work.
The main articles are:
How to mine cryptocurrency yourself
Hidden mining (Cryptojacking)
Main article: Hidden mining (Cryptojacking, cryptojacking)
Illegal mining
Main article: Illegal mining
Mining cryptocurrencies in Russia
Main article: Cryptocurrency mining in Russia
Mining cryptocurrencies in Kazakhstan
Main article: Cryptocurrency mining in Kazakhstan
2023
UAE mining company Phoenix Group goes public and earns $370 million
On November 21, 2023 mining , the Phoenix Group of UAE announced a successful holding on the initial public offering (IPO) Abu Dhabi Securities Exchange (ADX). During this procedure, approximately $370 million was raised. More. here
Miners around the world mined a record volume of bitcoins in a day
On November 12, 2023, miners around the world set an annual record for the volume of mined bitcoins - approximately $44.17 million (in the form of block rewards and transaction fees). This is the maximum figure since April 21, 2022, when miners bitcoin earned approximately $44.5 million during the day.
Revenue from bitcoin mining mainly comes from rewards for confirming transactions and for creating new blocks using high-tech computing equipment (ASIC). As of November 2023, miners receive BTC 6.25 for each successful unit creation in addition to transaction fees.
It is noted that in the period from April 2022 to November 2023, several factors contributed to the fall in the income of miners around the world. This is the current macroeconomic situation, negative investor sentiment, rumors about the possibility of a collapse of the cryptocurrency ecosystem, etc. However, by the end of 2023, there was an improvement in the situation: crypto-entrepreneurs were able to take control of the situation and restore investor confidence.
In mid-October 2023, the value of bitcoin began to grow rapidly amid news of possible approval of a spot bitcoin ETF by the US Securities and Exchange Commission (SEC). So, if on October 14, 2023, the cost of bitcoin was approximately $26.86 thousand, then a month later - $36.74 thousand. Thus, in a month, this cryptocurrency added approximately $10 thousand in price.
At the same time, on November 12, 2023, as a result of another recalculation, the complexity of bitcoin mining increased to 64.68 T (1 trillion), which became a new record. The previous record value was recorded on October 30, 2023, when the difficulty rose to 62.46 T.[1]
Mining company began using nuclear mini-reactors in its data centers
On October 6, 2023, the mining company Standard Power announced a project to equip its data centers (data centers) in the United States with nuclear mini-reactors. We are talking about using NuScale Power plants to produce clean, carbon-free energy. Read more here.
Kuwait bans cryptocurrency transactions and mining
On July 18, 2023, the Kuwait Capital Markets Authority (CMA) announced an "absolute ban" on virtually all cryptocurrency transactions in the country. This measure applies to payments and investments, as well as to the extraction of cryptocurrency assets. Read more here.
Brooklyn bathhouse uses heat from mining equipment to heat pool
On June 21, 2023, the Bathhouse bath complex in New York Brooklyn announced the introduction of an unusual pool heating system. We are talking about the use of heat that is generated during the operation of mining equipment. Read more here.
Sweden cancels mining perks, raises electricity tariffs to extract cryptocurrencies 58 times
Sweden in April 2023 canceled tax breaks for miners and raised electricity tariffs for mining cryptocurrencies 58 times ($0.035 per kilowatt-hour).
2022
About a third of bitcoin mining is in Texas
The performance of the bitcoin network collapsed on the 35% in 24 hours on December 25, 2022. After severe winter storms in Texas, large local miners had to turn off their farms due to power outages. So the cataclysm showed that about a third of bitcoin mining is in Texas.
Texas is home to some of the largest mining companies in the world. Среди них Riot Blockchain, Argo, Bitdeer, Argo, Compute North, Genesis Digital Assets и Core Scientific. Miners in that state have voluntarily suspended operations, reducing the load on power grids so residents can heat their homes, according to reports.
Microsoft bans cryptocurrency mining in its online services
Microsoft updated its Universal Licensing Terms for Online Services, banning mining cryptocurrency from any Microsoft service without prior approval from the company. The ban also applies to cloud service computing. Microsoft Azure This became known on December 15, 2022. More. here
Temporary ban on mining in the state of New York in the United States
New York in November 2022 became the first state in the United States to pass a law temporarily banning the mining of cryptocurrencies within its borders.
Mining ban in Moldova due to energy crisis
In Moldova, in October 2022, mining was banned due to the energy crisis. The import of specialized equipment for mining cryptocurrency also fell under the ban.
Binance creates a $500 million fund to lend to miners
In October 2022, it was announced that it was cryptoexchange Binance launching a $500 million fund to lend to miners. Due to the fall in price bitcoin and the increase in the complexity of production, mining is balancing on the verge of unprofitability.
Mining bitcoins affects the climate as much as raising cattle or burning gasoline
Mining bitcoins affects the climate as much as breeding cattle or burning gasoline, scientists calculated in September 2022. Each $1 of the cost of mined bitcoin causes damage to the planet by an average of 35 cents. In comparison, burning gasoline, worth $1, causes damage by 41 cents, and beef production by 33 cents.
Although bitcoin is called "digital gold," in terms of climate damage, it is more like "digital oil," since the climatic damage from bitcoin mining is almost 9 times greater than from gold mining, the researchers conclude.
62% of bitcoin production is carried out on gas and coal
On September 27, 2022, a study was published according to which almost two-thirds of the energy worldwide used to mine bitcoin is produced using fossil fuels.
According to the Cambridge Center for Alternative Finance (CCAF), by January 2022, fossil fuels such as coal and natural gas accounted for almost two-thirds of all electricity consumed by mining bitcoin - over 62%. At the same time, environmentally friendly energy sources accounted for 38% of the BTC energy balance.
Coal alone accounts for about 37% of total electricity consumption for Bitcoin mining as of early 2022, making it the largest source of energy for BTC mining, according to the study. Among renewable energy sources, the largest was hydropower, whose share is about 15%.
Although bitcoin mining relies heavily on coal and hydropower, over the past few years, the share of these energy carriers in the total BTC energy balance has decreased. In 2020, the share coal power engineering specialists in global BTC mining was 40%. The share of hydropower from 2020 to 2021 has almost halved - from 34% to 15%. On the other hand, the share of energy resources such as natural gas and nuclear energy in mining bitcoins has increased significantly over the past two years. The share of gas in the BTC energy balance increased from 13% in 2020 to 23% in 2021, and the share of nuclear energy increased from 4% in 2021 to almost 9% in 2022.
According to researchers from CCAF, the migration of miners from China was the main factor in the sharp fluctuations in the energy balance of bitcoin in 2020 and 2021. China's restriction of cryptocurrencies in 2021 and the resulting relocation of miners led to a significant decrease in the share of hydroelectric power plants in the BTC energy balance.
 | The Chinese government's ban on cryptocurrency mining and the subsequent movement of bitcoin miners to other countries negatively affected the environmental footprint of bitcoin, the study said. |  |
Analysts also noted that in each region, the structure of the BTC energy balance varies greatly. For example, countries such as Kazakhstan still rely heavily on fossil fuels, whereas in countries such as Sweden, the share of clean energy in electricity generation is about 98%.[2]
In South Korea, a toilet appeared, turning excrements into cryptocurrency
In August 2022, Cho Jae-won, a lecturer in urban and environmental engineering at the Ulsan National Institute of Science and Technology in South Korea (UNIST), introduced an environmentally friendly toilet connected to a laboratory installation. The device uses excrement to produce biogas and manure, and turns excrement into energy and produces digital currency. Read more here.
Norwegian miners Kryptovault to become first bitcoin mining company in the Arctic Circle
In August 2022, it was announced that Norwegian miners Kryptovault would be the first company to start mining bitcoin beyond the Arctic Circle.
Despite the huge costs of moving, the costs offset the cost of electricity, which is 160 times lower than in the more southern regions.
Reducing the cost of bitcoin production to $13 thousand
According to JPMorgan Chase & Co, Bitcoin's production cost fell from about $24,000 in early June to about $13,000 in mid-July 2022, which could be seen as a negative factor for pricing.
"The decrease in production costs may be perceived as a negative factor for the prospects for the growth of the BTC price in the future. The cost of production is perceived by some market participants as the lower end of the BTC price range in the bear market, "the strategists write.
Uzbekistan legalized cryptocurrency mining for legal entities
In early May 2022, President of Uzbekistan Shavkat Mirziyoyev signed a law that allowed legal entities to engage in the extraction of cryptocurrencies, but only through the use of electricity generated by solar power plants. Read more here.
The cost of mining bitcoin in all countries of the world. Card
The complexity of bitcoin mining has decreased for the first time
On March 4, 2022, it became known that the complexity adjustment for bitcoin mining for the first time showed a negative value, decreasing by 1.5%.
For the first time since November 2021, the Bitcoin mining complexity adjustment (BTC) fell, adjusting by 1.49%. The move follows a string of six consecutive positive difficulty adjustments that have seen production complexity and hashrate hit historic highs.
The average hash rate for the last two weeks by the beginning of March 2022 fell to 197.19 exaheshes per second (EH/s), as a result of which the average block time exceeded the 10-minute target and amounted to 10 minutes 9 seconds. As a result of the difficulty adjustment, miners competing to solve the next real block have found it a little easier.
Adjusting complexity is one of the most notable features of the Bitcoin protocol. Every fortnight or 2,016 confirmed blocks, the difficulty of mining a new block is "regulated" based on the average of the last 2,016 blocks, making block mining easier or more difficult.
Satoshi Nakamoto wrote in Bitcoin's White Paper: "The difficulty of proving work is determined by the moving average of the average number of blocks per hour. If they are generated too quickly, the complexity increases. "
In his opinion, over the past 2,016 blocks, blocks were generated too slowly, on average 10 minutes 9 seconds. As a result, the complexity adjustment is automatically reduced, and it will now be slightly easier for miners to solve valid blocks within the next 2,016 blocks.
According to Denver Bitcoin, a well-known bitcoin miner, a -1.49% correction could be the only one in a year.[3]
USA, Kazakhstan and Russia lead the mining market
In January 2022 Kazakhstan , it ranked third (13%) in terms of the share of the hashrate of the largest in terms of capitalization cryptocurrencies Bitcoin after and. USA China Russia was in 6th place.
Avira Free Antivirus now ships with built-in cryptocurrency miner
On January 10, 2021, it became known that after Norton 360 antivirus Avira it began to mine. cryptocurrency More. here
Tesla electric car owner mines cryptocurrency on it and makes $800 a month from it
In early January 2022, information appeared about how the American Siraj Raval mined cryptocurrency on the Tesla Model 3 electric car. The car owner has tried almost all possible ways to extract cryptocurrencies using his 2018 car. Read more here.
Norton Antivirus automatically installs cryptocurrency mining software
In early January 2022, it became known about the appearance in the Norton 360 antivirus of the Norton Crypto cryptocurrency mining tool, which, according to users, cannot be removed. Although the manufacturer claims that this utility starts mining only with the user's permission, it is important that it is automatically installed without any additional window during the installation of Norton 360 software. Read more here.
2021
Global cryptocurrency equipment and software market valued at $1.63 billion
In 2021, the global cryptocurrency market reached $1.63 billion, while in 2020 it was estimated at $1.44 billion. Such data at the end of January 2022 were published by analysts ResearchAndMarkets.com.
The largest players in the cryptocurrency market are Advanced Micro Devices,, BitFury Group BTL Group,,, Coincheck Intel Ledger SAS,,,, Nvidia Ripple Xapo Xilinx,,,, BitGo Binance Coinbase Global CoinDesk and Bitmain Technologies.
The main cryptocurrencies on the market are Bitcoin, Ethereum, Bitcoin Cash, Ripple, Dash Coin, Litecoin, etc. Stablecoins are also gaining popularity in the market. For example, in 2020, the volume of stablecoin circulation increased by 500%.
Transparency in financial payments is expected to boost the cryptocurrency market over the next few years. The growth of the market is also caused by the entry into the cryptocurrency industry of large companies. Asia Pacific was the largest region in the cryptocurrency market in 2020. Analysts ResearchAndMarkets.com expect the market to reach $2.73 billion by 2025 at a CAGR of 13.8%.
For example, in July 2021 American , the manufacturer electric vehicles Tesla began accepting cryptocurrency Bitcoin as a payment method due to its transparency and unique value. In March 2021, the American financial company PayPal Holdings acquired for Curv an undisclosed amount. Through this acquisition, PayPal strengthens and develops its initiatives to support cryptocurrencies and digital assets. Curv is an Israeli cryptocurrency security company. In addition, in March 2021, Indian financial services provider Techemynt introduced stable coins supported by the New Zealand dollar to combine the flexibility of cryptocurrency with the stability of New Zealand. dollar[4]
Rating of suppliers of mining equipment in Ukraine
In 2021, the Zaporizhzhya Ferroalloy Plant, owned by the oligarch, Igor Kolomoisky imported Ukraine cryptocurrencies $18.3 million for production equipment. This is the highest figure among all importing companies of such equipment for To Ukraine 5 years. This was reported in January 2022 by the NV.Biznes edition with reference to the data of the Molfar business intelligence agency.
The second position on the import of mining equipment is occupied by Tyvrov LLC Agro Logistics , which from November 2017 to January 2019 brought such products to Ukraine for $1.54 million. The company is part of the group Kernel of Andrei Verevsky.
In third place in the list is the company "Date Processing Technology," which in August and October 2019 purchased mining equipment in the amount of $1.15 million. This company belongs to Oleg Sheyko, who previously headed the State Service of Ukraine for regulatory policy and entrepreneurship development.
For $976.8 thousand, Master Import LLC, owned by businessmen Anton Klyuev and Yuri Tkachuk, purchased mining equipment for Ukraine. An individual - an entrepreneur from Petropavlovskaya Borshchagovka near Kyiv - El Abed Haitham Mohammad - in 2021 bought Bitmain Antminer S19 Pro systems 6 times abroad in the amount of $533,000.
The list formed by Molfar experts includes Ukrainian companies and individuals who since 2017 (since the beginning of the activation of the mining industry around the world), according to the 52wmb service (analyzes customs consignments), purchased mining equipment cryptocurrencies - Asic in the amount of $15 thousand. The purchases of information processing units (in places with the minimum necessary programs) were investigated directly, excluding the cost of other auxiliary equipment and structures.[5]
The earnings of all bitcoin miners are estimated at $15 billion
The total earnings of bitcoin miners in 2021 reached $15 billion, an increase of 206% compared to 2020. This was announced at the end of December 2021 by analysts at The Block Research.
| | It should be noted that mining companies sell their accumulated digital assets to pay for electricity and other resources, and some miners retain part of the cryptocurrency they mined, The Block Research notes. | |
According to analysts, the peak yield on bitcoin production was recorded in March 2021. During this period, miners earned about $1.75 billion, of which, income from commission costs for transactions amounted to $167 million. The rest of the funds are rewards for finding the block.
The income of miners received daily in October 2021 exceeded the figure of $40 million. Analysts at The Block Research also pointed to a 275% increase in miners' profits after a two-fold reduction in the miners' award for the mined block (halving). Before this event, the profit of miners was in the region of $14-18 million daily.
Throughout the year, profits from mining the flagship cryptocurrency have been supported by soaring prices of digital assets, which hit a record high in early November.
In 2021, China where three quarters of all were previously mined, it bitcoins is gradually reducing its share in world mining and by the end of December less than 50% of bitcoin is mined in the country. At the same time, the decrease in volume occurred even before the new restrictions introduced by the PRC authorities in June 2021. The second place in the world in terms of mining is occupied, having more USA than quadrupled its share - from 4.1% to 16.8%. Among other major bitcoin producers:,, and Malaysia. Germany Ireland Canada The rest of the countries account for 6% of world production.[6]
Bitcoin mining energy comparable to Spain's
Bitcoin by October 2021 is a serious enemy of energy conservation and an additional competitor to many countries in the gas and coal markets. The amount of energy consumption is comparable to Spain.
US, Kazakhstan and Russia lead in bitcoin mining
Russia has increased its share in global bitcoin production from 6.8% in June to 11% in September 2021. The country ranks third in the world, according to data from the University of Cambridge business school. The world leader in bitcoin production is the United States with a share of 35.4%. In second place is Kazakhstan with a share of 18.1% (+ 10 pp compared to June).
The high positions of Kazakhstan and Russia may be associated with the relocation of miners from China.
Mining bitcoins forms 30.7 thousand tons of electronic garbage per year
In mid-September 2021, economists from the central bank Netherlands , in cooperation with specialists Massachusetts Institute of Technology , found out that one - bitcoin transaction leads to the formation of the same amount e-garbage as the disposal of two. iPhone
Although the carbon footprint of bitcoin is well studied, less attention is paid to the turnover of computer equipment operated when working with cryptocurrency. From year to year, the complexity of computing in the bitcoin network is growing, for cryptocurrency mining, it is necessary to use special ASIC devices produced only for these tasks. Since the efficiency of mining is achieved due to the technical characteristics of new chips, miners need to regularly update the equipment used, recycling the outdated one to install more productive solutions.
| | The service life of bitcoin mining devices is still 1.29 years. As a result, according to our estimates, the entire bitcoin network currently generates 30.7 kilotons of electronic waste annually. This value is comparable to the volume of electronic garbage of small IT and telecommunications equipment in a country like the Netherlands, - say researchers Alex de Freese and Christian Stoll. | |
Economists analyzed that in 2020 112.5 million transactions were processed in the Bitcoin network (compared with 539 billion transactions processed by traditional payment service providers in 2019). Thus, each individual transaction using the flagship cryptocurrency generated at least 272 grams of electronic waste. This figure is comparable to two Apple smartphones.
The researchers note that the e-waste issue is likely to raise even more concerns if the price of cryptocurrency continues to rise, as it will encourage further investment in upgrading mining equipment.[7]
China steps up fight against cryptocurrency mining
In September 2021, the country's authorities drew attention to miners who disguise themselves as "data researchers " and data center operators. In September, the number of inspections of colleges, research institutes and data centers for illegal mining activity increased. One reason for this hunt is that Beijing is concerned about energy security ahead of the winter season.
These events could further limit cryptocurrency mining in China, which accounted for 46% of the global hashrate back in April.
An anonymous Chinese miner told Bloomberg that he continues to work, but regularly changes the deployment of mining equipment and stores no more than 100 devices in one place. This confuses the authorities, who are monitoring unusual spikes in electricity consumption.
The authorities of the northern province of Hebei, where mining activity is relatively low, demanded that companies and scientific institutions stop using their computer systems for mining and conduct appropriate internal inspections by September 30.
Large-scale growth in mining activity can "seriously affect economic and social development, and will also create direct threats to national security," said the local Internet regulator on September 15, 2021. His statement notes that the consumption of electricity for mining contradicts the country's policy of reducing greenhouse gas emissions.
In October, the Hebei government will launch a special mechanism to monitor miner activity. The persons responsible for the networks where cryptocurrency mining takes place will be punished, and these systems themselves will be disconnected from the Internet. The coal-rich Inner Mongolia government announced the hiring of a contractor for consultations on how to eradicate mining.
Laos allowed mining and trading of cryptocurrencies
In September 2021 Laos , it allowed mining and trading of cryptocurrencies, which is a change in the policy of the debt-laden Southeast country, Asia which will allow it to benefit from the suppression of the extraction of digital currencies in. China
Six companies, including construction groups and a bank, have been cleared to start mining and trading cryptocurrencies such as Bitcoin, ethereum and litecoin.
"Whatever one may say, Laos has an excess of generating capacity, but it doesn't have much domestic demand for that energy," says David Tuck, partner at Lyriant Advisory.
"Using hydropower to mine cryptocurrencies could allow Laos to present the industry as" carbon neutral, "while the carbon footprint of cryptocurrencies is facing growing international criticism," Tuck added.
Telecom operator of Thailand Jasmine Telecom Systems began to mine bitcoin
At the end of July 2021, the telecom operator Thailand Jasmine Telecom Systems (JTS) from announced the launch of a new business -. mining bitcoin The company expects to become the largest miner in the countries that are members of the Association of Southeast Nations (Asia ASEAN). More. here
New Jersey Pension Fund in the United States with assets of $30 billion began to invest in mining companies
At the end of July 2021, it became known that New Jersey State Pension Fund with assets of $30 billion, one of the poorest pension funds, USA invested more than $7 million in two mining companies. The state fund said it owns 97,274 shares of Riot Blockchain and 108,148 shares of Marathon Digital Holdings. Both companies are among the largest mining firms. cryptocurrencies More. here
First death from cryptocurrency mining recorded
At the end of July 2021, it became known that a bitcoin miner died in Thailand, which is considered the first case of death from cryptocurrency mining.
Danai McMeck, 26, was electrocuted as he tried to turn on his computer farm to mine more cryptocurrency. The incident occurred on July 20, 2021 in the central province of Chonburi in Thailand. Read more here.
China and the United States are leading in bitcoin mining
In July 2021, the Center for Alternative Finance at Cambridge University published a study reporting that Russia and Kazakhstan have significantly added to global bitcoin mining.
According to experts, by April 2021, China accounted for less than half of the 46% of the capacity used to extract bitcoin, which is significantly less than 75.5% in September 2019. And this is before the authorities ordered restrictions on the extraction of cryptocurrencies.
Over the same period, Kazakhstan's share in global bitcoin mining increased almost 6 times, rising to 8.2% from 1.4%. The United States rose from 4.1% to 16.8% and took 2nd place, and Russia and Iran became 4 and 5 countries, respectively, in terms of bitcoin production in the world.
Bitcoin mining, during which transactions are confirmed and new units are produced, is a very energy-intensive process. Computers around the world compete to solve complex mathematical puzzles so that various transactions around the world are successful.
The ever-growing cost of bitcoin has stimulated more and more people to mine cryptocurrency over the years, which ultimately led to the creation of an entire industry focused on the production and sale of equipment for mining cryptocurrency, which follows that the more people mine bitcoin, the more energy is consumed.
The general trend has caused concern about the potential environmental impact of bitcoin in general, due to the fact that most of the mining was carried out in, China which largely depends on its consumption. coal power engineering specialists The authorities of several large Chinese regions, and these are Sichuan, Xinjiang and Inner Mongolia, in early summer 2021 introduced restrictions on the extraction of cryptocurrencies in their territories.
But Cambridge researcher Michelle Rauhs says bitcoin's energy balance is hard to pinpoint. During the rainy season, Chinese miners often move to Sichuan, a hydropower-rich province in the southwest of the country.
It also shows that many bitcoin miners fled from China to neighboring Kazakhstan, a former Soviet republic, before a ban on cryptocurrencies was imposed in June. As of July 16, 2021, Kazakhstan has more than 22 gigawatts of electric capacity, most of which are coal and gas plants.
The researcher, who heads the direction of digital assets at the Cambridge Center for Alternative Finance, in 2019 created an index showing how much energy bitcoin consumes. The academic said he is now working on a new model that illustrates the environmental impact of bitcoin mining.[8]
Founded 100 years ago, the hydroelectric power station in the United States began to mine bitcoins
In mid-2021, the Mechanicville hydroelectric power station, which is located in New York State and is one of the oldest in the United States, began mining bitcoins using original equipment. As it turned out, it is more profitable for her to extract cryptocurrency than to sell electricity. Read more here.
70% of miners from China turned off equipment and sell it after crypto bans in the country
By the end of June 2021, about 70% of miners in China turned off equipment after the introduction of cryptocurrency restrictions in the country, and in the near future this figure may grow to 90%. Kevin Zhang, vice president of business development at Foundry mining company, announced this on his Twitter blog without specifying the sources of his data. Read more here.
Iran controls 4.5% of all Bitcoin mining in the world
Subsidized electricity prices and economic sanctions restricting access to foreign currency have made Iran a major base for cryptocurrency mining, according to analytics firm Elliptic, which believes the country has 4.5% of all Bitcoin mining in the world.
In May 2021, Iran banned energy-intensive mining of cryptocurrencies such as Bitcoin ahead of the peak electricity demand season, after a sharp rise in consumption led to power outages in major cities.
The ban came into force immediately and will last until September 22, President Hassan Rouhani said, adding that about 85% of current cryptocurrency mining activities in the country were carried out without licenses.
Nvidia limits mining capabilities for video cards to overcome device shortages
In May 2021, Nvidia began limiting the ability to mine cryptocurrencies in its video cards in the hope of overcoming the shortage of graphics accelerators. Read more here.
"You can rivet this currency." President of Belarus Lukashenko supported the construction of mining farms
On January 5, 2021, President of Belarus Alexander Lukashenko, during a visit to the Horizon Innovation Center, announced his support for mining farm construction projects. Read more here.
2020
The wettest weather in 20 years made it possible to profitably mine bitcoins in Sweden and Norway
At the end of December 2020, it became known that Sweden and Norway became centers of profitable bitcoin mining thanks to the wettest weather, at least in the last 20 years. Due to the filled reservoirs of hydroelectric power plants, the cost of electricity in these countries decreased significantly, the reduction in production costs coincided with an increase in the price of bitcoin by almost four times.
Bloomberg Unusually wet weather with moderate temperature figures in Northern allowed hydro To Europe reservoirs to be filled to the highest level, making the cost of electricity in the Nordic countries close to zero for a long time, and average prices in 2020 were about a third of those fixed in Europe's Germany largest electricity market, it said.
In 2019, Norway had the lowest electricity prices for industrial customers among the 30 member countries of the International Energy Agency. In the first half of 2020, it also had the lowest prices for non-households in the European Union, Norway even slightly ahead of Iceland, which is also known for favorable conditions for owners of mining crypto farms.
Attractive for mining activities, the circumstances have developed for local miners after several years of low profitability. Many of those attracted by the northern regions of Europe during the bitcoin rally in 2017 have since left. A top manager at Genesis Mining, which is based in Hong Kong, Filip Salter noted:
| | There were times when we didn't earn anything, but this year our profitability has more than tripled. | |
| | There is a very important strategic shift from mining in China to mining in Western countries such as Sweden, as bitcoin investors become more public and want more stability and security, Salter added. - This is one of the most significant achievements in bitcoin mining, which is worth paying attention to.[9] | |
Ukrainian oligarch Kolomoisky launched a mining farm in the United States
In mid-December 2020, it became known about the launch of a mining farm at the CC Metals & Alloys (CCMA) steel plant in the United States. This project was implemented by Ukrainian billionaire Igor Kolomoisky together with his business partners. Read more here.
In China, began to cut power to miners
In early December 2020, Chinese media reported that the authorities of the city of Baoshan in the Chinese province of Yunnan began to cut off electricity to miners, contacting electricity producers directly. The ban is understood to have been caused by a local conflict of economic interest and probably does not speak to Beijing's push to crack down on cryptocurrency mining.
| | There is no need to overestimate the impact of this incident, "said Chinese crypto reporter Colin Wu, who received copies of official ban documents from miners. - The attitude of local energy companies to cryptocurrency mining often changes and is connected more with economic interests than with political pressure. | |
According to the Bitcoin Mining Electricity Consumption Index calculated by the University of Cambridge, Yunnan was China's fourth-largest region by mining speed after Xinjiang, Sichuan and Inner Mongolia as of April 2020. Yunnan then represented 5.42% of the world hashrate, that is, he overtook all countries in mining, with the exception of China, the USA, Russia and Kazakhstan.
In June 2020, Wu revealed that the Yunnan government had ordered the closure of 64 unauthorised cryptocurrency mining businesses, including seven construction projects. Tax evasion and security risks were cited as the basis, including in connection with the connection of enterprises to local hydroelectric power plants. In late May, an explosion occurred at a hydroelectric power station in Yunnan, killing six people and injuring five others. After that, safety standards for hydroelectric power plants were tightened. Later, a fire developed at one of the cryptocurrency mining enterprises due to a wiring malfunction that could not cope with the power of the devices used.[10]
The volume of computing power in the bitcoin network has reached record levels
In June 2020, the Bitcoin hashrate exceeded 130 EH/s and approached the historical maximum of 136.24 EH/s, which was set in March 2020.
The total amount of computing power in the network of the first cryptocurrency increased after another recalculation of complexity. It took place on June 4, over the past month the value has decreased by 15%, to 13.73 T.
The output interval of the blocks was reduced to 7 minutes with a standard value of 10 minutes. Thanks to this, miners overtook the expected order of their release by more than 100 blocks. Also, the mempool was completely cleared of unconfirmed transactions.
The average transaction processing fee fell to $1, although May 20 exceeded $6.6. Despite an 84 percent decline from the high, the figure remains several times higher than normal levels. For example, on January 1, it was $0.29, and in mid-April - $0.39.
Iranian president unveils national strategy for mining cryptocurrencies
At the end of May 2020, Iranian President Hassan Rouhani, at a meeting with representatives of the Central Bank, the Ministry of Energy and the Ministry of Information and Telecommunications Technologies, announced the need to develop a set of measures to regulate cryptocurrency at the state level.
As part of the national strategy, Rouhani instructed to develop regulatory acts and find a way for the state to generate income from cryptocurrency mining.
At the end of May 2020, the Iranian parliament adopted a proposal to extend to digital currencies the requirements of laws regulating the turnover of foreign currencies in the country, as well as the import and export of funds from the state. If the relevant law is adopted, any cryptocurrency exchange operating in Iran will have to receive a license from the Central Bank for its work.
Iran was among the first states to officially allow mining, and later the Iranian National Tax Administration announced tax breaks for those citizens who would return their mining operations to Iranian jurisdiction.
As of January 2020, in less than a year, Tehran issued about 1,000 permits for the extraction of cryptocurrencies to citizens of the state.
In May 2020, Iran accounted for 4% of the global hashrate - the computing power used to mine bitcoin. Compared to September 2019, this value doubled.
According to observers, Rouhani decided to develop the topic of cryptocurrencies, since it is able to have a positive impact on the country's economy, which is under US sanctions. It is noteworthy that in February 2020, the administration of US President Donald Trump expressed concerns that cryptocurrencies could be used to bypass sanctions, including Iran.[11]
In Ukraine, police mined cryptocurrency on confiscated equipment
In mid-May 2020, it became known that in the Ukrainian city of Nikolaev, police mined cryptocurrency using confiscated equipment. Upon the embezzlement or seizure of other people's property by abuse of an official by his official position (part 2 of article 191 of the Criminal Code of Ukraine), the territorial department of the State Bureau of Investigation (SBI) began a pre-trial investigation.
It all started with a statement about the theft of electricity, which was filed by Nikolaevoblenergo. According to the press service of the RRB in the city of Nikolaev, in March 2020, employees of the Ship Branch of the National Police in the Nikolaev region seized 544 special computers ASIC Bitmain Antminer, designed for mining cryptocurrencies.
On April 21, 2020, police raided a citizen who, according to investigators, was involved in servicing equipment at a mining farm. After the search, law enforcement officers took the citizen to the police station, where they beat him. According to the regional publication Novosti-N, he was beaten by four police officers who demanded passwords to work with the seized equipment and $30,000.
During an internal investigation, the RRB established that law enforcement officers misappropriated part of the seized equipment. Computers were installed at the homes of suspected police officers and worked around the clock. They were found during searches.
The mining farm administrator injured by the police wrote a statement to the RRB. According to this statement, law enforcement agencies searched suspected law enforcement officers: the head of the Vitovsky (Zhovtnevy) district police department of the Nikolaev region, Lieutenant Colonel Dmitry Nosov, his deputy, the head of the investigation department, Yuri Garkushi, and several operatives.[12]
Bitcoin mining reward halved
On May 11, 2020, the so-called halving took place on the bitcoin network, when the miners' award for the block mined was halved - from 12.5 BTC to 6.25 BTC. This is the third halving in the history of the world's most popular cryptocurrency.
Miners initially received 50 BTC, on November 28, 2012 this number decreased to 25 BTC, on July 9, 2016 - to 12.5 BTC.
The creators of Bitcoin laid halving in his algorithm in order to make the issue of cryptocurrency controlled. It is assumed that over time bitcoin will be mined more and more expensive, new coins will be released to the market more and more slowly. This will contain cryptocurrency inflation. When the central banks of various are actively developing ideas for creating national digital currencies to help the economy affected by the COVID-19 coronavirus pandemic, supporters of digital money call the limited issuance of bitcoin a big advantage.
Crypto enthusiasts hope that the halving will significantly affect the bitcoin exchange rate. The previous two "half-wins" of bitcoin had a significant long-term impact on the price of a digital asset. While the coin did not take off immediately on halving day, the value of the cryptocurrency steadily rose for months after each such event.
It is expected that the least efficient miners will no longer be able to take part in production if the reduction in the size of the reward is not offset by an increase in the exchange rate, which is why computing power will increasingly be concentrated in the hands of large players. In addition, it is possible to slow down the release of blocks, but it is unlikely to be long.
A month before the reduction by 50% of the miners' award for the block mined, the bitcoin rate rose by 26% and for some time exceeded $10 thousand. By 12:00 Moscow time on May 12, 2020, the price of one bitcoin is $8796.[13]
Ministry of Energy of Ukraine directs excess electricity to extract cryptocurrencies
In early May 2020, the Ukrainian Ministry of Energy and Environmental Protection announced the need to use surplus electricity for the extraction of cryptocurrencies. The agency gave the corresponding instruction regarding the practical application of such an opportunity to the state enterprise Energoatom , the operator of all operating nuclear power plants in the country. Read more here.
Chinese city authorities start mining cryptocurrency using renewable energy
On April 28, 2020, it became known that the authorities of the city of Yaan in the Chinese province of Sichuan supported cryptocurrency mining farms using renewable energy from local hydroelectric power plants. The corresponding document was published by the Municipal Economic and Information Bureau and the Commission on Municipal Development and Reform of Yaan.
The document says that the city authorities have allocated a special geographical zone for the construction of mining farms, electricity to which will come from hydroelectric power plants. Officials expect in this way to attract investors interested in mining and blockchain technologies to the region, as well as companies with experience in mining or without it.
China is known to be a major player in the cryptocurrency mining industry. According to a CoinShares report, at the end of 2019, Chinese bitcoin miners were responsible for as much as 66% of the global hashrate (the total computing power of mining equipment), with 54% in Sichuan province.
However, due to the spread of the coronavirus, the country began to lose its position in the global cryptocurrency market. In April 2020, the cryptocurrency business decided to leave Baite, previously China's largest bitcoin farm. Instead of bitcoins, Baite decided to focus on altcoins. One of the reasons for leaving the market was the upcoming twofold reduction in the remuneration of miners for joining the block in May 2020.
In addition, outdated equipment negatively affects local mining enterprises. In March 2020, it became known that more than 40 bitcoin mining enterprises in China were forced to cease operations due to the fact that ASIC miners Bitmain Antminer S9 ceased to be effective.[14]
IT specialist Baidu went to prison for mining bitcoins on the company's servers
In mid-March 2020, it became known that the former IT specialist Baidu An Bang (An Bang) went to prison for mining bitcoins on the company's servers. Read more here.
Ukrainian official caught mining cryptocurrency in the workplace
At the end of February 2020, it became known about the detention of one of the heads of the IT department of the State Judicial Administration of Ukraine (GSA). In the workplace, he used equipment to mine cryptocurrencies, and also leased server capacity. Read more here.
2019
Underground mining at the Ukrainian Railway
In mid-November 2019, it became known that underground mining was organized at the Ukrainian Railway (UZD) and caused large losses to the enterprise. Read more here.
CPUcoin will pay you to use your PC until you use it
In early November 2019, CPUcoin, a developer of cloud computing resource sharing software, announced that it intends to pay users for the time they do not use their PCs. The fact is that the Compute Generation Network miner network turns free computing resources into a distributed, scalable cloud network. Read more here.
Hackers embed code in WAV files for hidden mining of cryptocurrencies
In October 2019, information security experts reported that hackers learned to place malicious code in WAV files for mining cryptocurrencies. Read more here.
Record capacities thrown at cryptocurrency mining
In mid-September 2019, computing power thrown into production cryptocurrencies reached a new record. It is estimated that over the summer, more than 600,000 new powerful machines appeared on the network. mining
According to BTC.com crypto mining data, bitcoin's two-week average hash rate reached 85 exaches/s. Thus, the bitcoin hashrate has increased by about 8 times since the previous record in December 2017. Such pronounced growth indicates an increase in investments in cryptocurrency, which indicates investor confidence in the long-term prospects of this direction.
In addition, the efficiency of mining equipment is growing. In the summer, several new models of integrated circuit miners (ASIC) appeared on the market with an average hashing power of about 55 terahesh/s. Assuming that the increase in mining power by 35 exahesh/s, which occurred in mid-June 2019, was due to new equipment, it can be calculated that more than half a million such machines connected to the bitcoin network.
Powerful ASIC miners from major manufacturers such as Bitmain, Canaan, InnoSilicon and MicroBT cost from $1,500 to $2,500 apiece. Thus, with the connection of half a million such machines, the leading manufacturers of miners could receive an income of $1 billion in three months. At the same time, the demand for mining equipment significantly exceeded supply, partly due to the rainy summer in southwestern China, which allowed for cheap electricity. For the same reason, interest in the East Siberian region of Russia is growing, where the Bratsk hydroelectric power station can become a source of cheap energy for mining.
It is assumed that the growth rate of mining will only grow, and by the end of the year the average total hashing power of bitcoin for the first time in history will exceed the threshold of 100 exahesh/s.[15]
In Iran, miners were exempted from taxes
In September 2019, it became known about the exemption of miners from taxes in Iran. However, those people and companies who have agreed to return the earned funds to the country can count on this indulgence.
The new initiative was introduced by the Iranian National Tax Administration (INTA). According to the ministry, the extraction of digital money is recognized in the country as taxable activities, so it may be subject to the principles in the context of the repatriation of foreign income, which are established by the central bank.
Exemption from income tax on funds returned from abroad and on those that are earned in Iran looks logical, since if only the first part of such a proposal is introduced, then the business will export all the capital earned and import it back into the country so that it is exempt from income tax.
However, miners claim that most of the revenue (70-80%) from cryptocurrency mining is directed to expanding business in Iran.
In the summer of 2019, the Iranian government recognized cryptocurrency mining as a separate type of industrial activity. This legalized mining, but companies engaged in it should receive a license to work in the country.
Earlier, Iran reported plans to use cryptocurrency to trade with Russia. Tehran considers it a promising direction to use cryptocurrency to get out of the influence of the dollar, said Mohammad Reza Purebrahimi, head of the Economic Affairs Commission of the Assembly of the Islamic Council (Parliament) of Iran.
In addition to Iran, some other states actively encourage the innovation sector to stimulate economic development. For example, in August 2019, the Portuguese tax office said that in the country cryptocurrency transactions and payments are completely exempt from taxes.[16]
Ukrainian workers connected nuclear power plants to the Internet to mine cryptocurrency
In August 2019, it became known that employees of the South Ukrainian NPP connected the computer equipment of the nuclear power plant to the Internet to extract cryptocurrency. The Security Service of Ukraine (SBU) considered this incident a potential violation of state secrets, since the nuclear power plant belongs to critical infrastructure. The agency is conducting an investigation. Read more here.
Bitcoin mining takes energy that will be enough for the whole of Switzerland
In early July 2019, Cambridge University published data on energy consumption in the field of cryptocurrency mining. According to experts, bitcoin mining on a global scale requires about 58.93 terawatt-hours of electricity. This is more than for all of Switzerland (58.46 TVt·ch) or Kuwait (57.78 TVt·ch). For comparison, in the United States and China, the total energy consumption per year is measured at 3902 and 5564 TVt·ch, respectively.
Bitcoin energy scientist Alex de Freeze from a consulting company PwC in a conversation with the BBC noted that cryptocurrencies they left a carbon footprint in the form of emissions, the volume of which varies from place to place, depending on the energy supply. According to de Vries, the cryptocurrency network spends a lot of energy, processes much less financial transactions per year - 100 million against 500 billion, respectively. In terms of one transaction, bitcoin needs more energy for all financial transactions to banks in them, data centers he added.
According to a study published in the scientific journal Joule, electricity used for bitcoins produces about 22 megatons of carbon dioxide per year. This is as much as, for example, the city of Kansas City in the United States.
The University of Cambridge has created a special site that assesses the "economic life path" of all bitcoin miners. The researchers use the average price per kilowatt per hour ($0.05) and the energy demand of absolutely all computers used to obtain cryptocurrency. So they can calculate how much electricity is consumed at each particular moment.
According to experts, bitcoin mining takes about 0.21% of the world's energy supply, lighting - 0.25%. At the same time, hydroelectric power plants are able to "feed" the entire network of bitcoins 77 times, various kinds of biofuels and waste processing - 11 times, and solar, wind and other "green" - power plants - 26 times[17]
Iran blocks bitcoin mining due to electricity problems
At the end of June 2019, it became known that Iran began to suppress bitcoin mining due to an electricity problem in the country.
Iranian authorities confiscated about 1,000 bitcoin mining machines that were deployed at two abandoned factories. These mining farms consumed about 1 megawatt of electricity.
Iranian Energy Ministry spokesman Mustafa Rajabi said growing cryptocurrency production domestically has made the power system "unstable" and created problems for consumers. According to him, electricity consumption in the country increased by 7% in June 2019 compared to the previous month. Moreover, most of this surge is associated with the extraction of cryptocurrencies.
Earlier, Iranian Deputy power Minister Homayoun Haeri has already said that electricity spent by cryptocurrency miners should be paid at real prices. Despite the fact that in September 2018, the Iranian authorities recognized mining as an independent industry, there is no regulatory framework for the cryptocurrency sphere in the country.
Bitcoin and other cryptocurrencies are becoming an alternative in Iran to accumulating funds along with gold and US dollars. In addition, since 2018, Iran has a restriction on the storage of foreign currency. To support the Iranian real, citizens are prohibited from holding more than ten thousand euros in cash.
The low cost of electricity has made Iran an attractive place for mining - bitcoin mining there has become much more profitable compared to other countries.
According to rough estimates, subsidizing electricity costs the Iranian government about $1 billion a year.
| | In an environment where the economy is suffering from debilitating sanctions, which are getting tougher almost every day, the government is now looking for ways to stop miners who really need energy, notes. Forbes[18] | |
Bitfury fund investors will be able to invest in cryptocurrency mining facilities
April 24, 2019 Bitfury Group announced the creation of a regulated mining fund, thanks to which investors will be able to invest in facilities for production. cryptocurrencies- Blockchain the company launched this project together with the Swiss investment firm Final Frontier. More. here
China intends to completely ban cryptocurrency mining
China The authorities intend to completely ban mining in the cryptocurrencies country by 2021. This was reported on Tuesday by China Central Television.
According to him, the State Committee for Development and Reform of the PRC has published an updated version of the 'List of Regulation of the Structure of Production', containing activities that will be encouraged or prohibited by the government, as well as those that the country's economy should get rid of in the future. The 130-page document indicates' mining of virtual currencies (production of bitcoins and other virtual currencies) 'among the activities subject to termination.
According to legislative norms, it is prohibited to make investments in the areas of business listed in this list. "The term of curtailment (of these types of activities - approx. TASS Information Agency of Russia) is January 1, 2021," the document says.
2018
It became unprofitable to mine bitcoin. Its price is lower than the cost of mining
In December 2018, it became known about the unprofitable mining of bitcoin. Its price has become lower than the cost of mining, according to the Financial Times (FT), citing mining companies and private miners.
The publication provides data from unnamed experts who claim that for break-even bitcoin production, its rate should be at least $5 thousand. By December 20, 2018, the figure is about $4 thousand. Compared to the peaks recorded in December 2017, this cryptocurrency fell by about 80%.
The fact that bitcoins have ceased to generate income for those who are engaged in their mining also confirms the freeze on the construction of the largest British bitcoin mining enterprise (it was built by Bladetec), as well as the fact that Chinese mining equipment manufacturers Ebang, Canaan and Bitmain, who were going to hold an initial public offering on the Hong Kong Stock Exchange, eventually postponed the IPO.
In addition, Nvidia, which sold video cards for mining and made hundreds of millions of dollars from this, closed its corresponding divisions. And the American mining company Gigawatt filed for bankruptcy in November 2018.
Bitcoin's hashrate - a quantity that shows how much energy miners use - fell more than 40% from August to December 2018. This means that since September, about 1.5 million bitcoin mining farms have been disconnected, the FT cites data from the research company Fundstrat.
According to experts, mining has a built-in equilibrium mechanism: the higher the competition among miners, the more difficult it is to mine cryptocurrency, and the easier it is to mine, the lower the competition. Therefore, companies with a low cost of cryptocurrency production will be able to maintain their business against the background of a fall in the cost of bitcoin and in the future count on income, according to BitMex.[19]
Bitcoin mining will raise Earth's temperature by 2 ° C
The researchers estimated the amount of carbon emissions into the atmosphere due to the production of electricity needed to mine cryptocurrencies. They managed to build a scale that predicts the amount of consumption until 2033 - it can raise the average temperature on the planet by 2 ° C. At the same time, according to their estimates, an increase in temperature by more than 1.5 ° C will lead to "irreversible consequences for the climate," writes Haitek.
The environmental damage of bitcoin production has been a topic for criticism of technology for several years - mainly thanks to the work of Dutch economist Alex de Vries. Its texts have long been published on the Digiconomist blog, and more recently in Joule, a peer-reviewed academic journal.
Previously, Alex de Vries's research showed that the energy consumption required for production is roughly equivalent to Austria's energy needs and may be more resource-intensive than gold mining.
"It's a pretty shockingconclusion," noted Alex de Vries. "We already knew that electricity demand was extreme, but we didn't yet have a clear picture of the environmental impact of this."
Based on this analysis, the researchers determined that last year bitcoin production caused the release of more than 69 million tons of carbon - just over 1% of all emissions from energy production worldwide.
"This is a huge figure, given that bitcoin accounted for only 0.03% of all non-cash transactions in the world over the same period," scientists say.
To predict how many emissions would be produced next, they matched the data with the introduction of similar technologies. Even if it follows the slowest level of adoption, bitcoin will reach the same threshold within 22 years, raising the temperature on Earth by 2 ° C, the researchers concluded.
Miners rush to Scandinavia over cheap electricity
In April 2018, it became known about the growing interest of miners in Scandinavian countries, which attract low ambient temperatures and cheap electricity.
As the Reuters news agency reported on April 10, Iceland has long been the most attractive place for those who mine cryptocurrencies. However, the situation has changed: miners began to actively move to Sweden and Norway, where the cost of kilowatt-hours of electricity is only 6.5 and 7.1 euro cents, respectively. In Iceland, the figure is 8 cents, and on average in Europe - 11 cents.
The miners' interest in Scandinavia is in the hands of the Swedish company Vattenfall and the Norwegian Statkraft, which dominate the energy market in their countries. Although customers mining bitcoin and other digital currencies bring such companies a tiny part of their income, Vattenfall and Statkraft see this business as a good opportunity.
According to Morgan Stanley analysts, the global power consumption of equipment used to mine bitcoin in 2018 will be about 130 terawatt-hours, which corresponds to the consumption of all of Argentina.
Director and co-founder of Canadian HIVE Blockchain Technologies (began production of "ether" in Sweden in January 2018) Olivier Russy Newton says that the company around the world is looking for options to achieve the maximum possible energy intensity. In Sweden, the HIVE mining farm already uses 17.4 MW of energy, and by September 2018 the figure should rise to 26.8 MW.
In March 2018, Bitfury Group announced the launch of a data center for bitcoin mining in Norway. The project cost amounted to $35 million. Bitfury is poised to purchase 350 gigawatt hours of renewable energy from Helgeland Kraft.
Bitfury board member Bill Tai said that many bitcoin miners, including Chinese ones, are eyeing Norway because of its abundant cheap hydropower.
Reuters notes that the extraction of one bitcion can take energy worth 1,400 to 1,800, dollars which roughly corresponds to the annual electricity costs of one German family of four.[20]
Theft of 600 servers for mining cryptocurrencies in Iceland
In March 2018, it became known about the theft of several hundred servers from data centers in Iceland. Local police called the theft one of the largest in the country's history.
According to The Associated Press, four raids on data centers in Iceland occurred in December 2017 and January 2018. The criminals took possession of a total of about 600 servers. The damage is estimated at $2 million. Although 11 suspects, including a security guard from one of the data centers, were arrested, law enforcement failed to return the equipment.
According to Visir, the stolen cars did not contain data, so their owners suffered only financial losses from the loss of the equipment itself.
| | This is a giant theft of a scale never seen before, "says Olafur Helgi Kjartansson, a police commissioner who works at a branch on the Reykjanes Peninsula (southwestern part of Iceland), where two abductions occurred. - Everything indicates that the crime was well organized. | |
The police asked energy companies and Internet services to pay attention to unusual cases of energy use, which could be caused by the operation of stolen servers, since, according to law enforcement agencies, these computers will be used to mine cryptocurrencies.
More miners are choosing Iceland, known for its relatively temperate climate and abundance of hydroelectric power, to house their computing equipment. In this country, the production of one bitcoin, taking into account electricity costs, costs about $4,746, which is one of the lowest indicators in the world, according to the BBC.
In 2018, the volume of electricity used by cryptocurrency mining devices for the first time exceeded the amount of energy consumed in all residential premises of all residents of Iceland (in the amount of 348 thousand people).[21]
Where mining is cheaper and most expensive
The most expensive mining bitcoins costs, and South Korea the cheapest to mine cryptocurrency in Venezuela. This was revealed by the results of the Elite Fixtures study, which analyzed the cost of mining 1 bitcoin in 115 countries of the world, taking into account energy costs.
As CNBC reported in February 2018, in their calculations, specialists relied on information provided by governments and utilities of different countries, as well as data from the International Energy Agency (IEA).[22]
Cryptocurrency mining requires computers of high computing power that consume a lot of electricity. Accordingly, the profit from mining directly depends on the cost of electricity in a particular country. It is most profitable to earn cryptocurrency in Venezuela, where mining 1 bitcoin costs $531. As the Crypto Daily explains, electricity in this South American country is subsidized by the state, which explains such a low cost.[23]
Trinidad and Tobago is in second place: in order to "solicit" 1 bitcoin here you need to spend already $1,190. Also in the top three most profitable for mining states was Uzbekistan with an indicator of $1788.
The more extensive list of 15 states with the lowest electricity costs for cryptocurrency mining includes several more countries of the former USSR: Ukraine ($1852), Belarus ($2177), Kazakhstan ($2835). As for Russia, it is not on this list, since the cost of 1 bitcoin in terms of energy costs in our country is $4675.[24]
The opposite rating, which includes countries with the most expensive energy and high cost of cryptocurrency mining, is headed by South Korea ($26,170). Also in the top 15 are a number of island states - Niue ($17566), Solomon Islands ($16209), Cook Islands ($15861) and others. There are also several countries of Western Europe - Germany ($14275), Denmark ($14275), Belgium ($13482).
China restricts access to electricity to miners
In early January 2018, it became known that China decided to limit the use of energy resources by bitcoin miners. It's a potential challenge for an industry whose energy-intensive computer networks provide transactions in cryptocurrency.
According to a report by Bloomberg, on January 3, 2018, the People's Bank of China announced its plans in a closed meeting. How exactly the restrictions will be implemented is not specified.
Chinese officials are concerned that bitcoin miners have taken advantage of low electricity prices in some regions of the country, as a result of which electricity use has increased sharply, the publication said. TechCrunch Local officials were asked to examine this situation. The investigation will also involve other regulators, such as the National Development and Reform Commission, which oversees energy supply.
While the proposed restrictions are unlikely to have a noticeable impact on transaction rates, they highlight global concerns about rising energy consumption by bitcoin miners. According to Digiconomist Bitcoin, by the beginning of 2018, the amount of electricity consumed in the industry is equal to the energy consumption of 3.4 million US households. The largest cryptocurrency exchange companies in the world operate in China, with some in the hydroelectric region of Sichuan and Yunnan.
On January 3, 2018, a refutation appeared on social networks that China had imposed restrictions on the activities of bitcoin miners, writes Caixin magazine, citing an "authoritative source."
The measures taken by China followed a sharp course on cryptocurrencies. In September 2017, the authorities declared illegal the initial placement of crypto coins and called on local exchanges to stop trading in virtual currency.[25]
2017
China accounts for 60% of global cryptocurrency mining capacity
According to the data, Bitfury Group Russia only 2% of the world's electronic currency production capacity is accounted for. Leading China with 60%, USA Canada and in the aggregate second place with 16%, then comes with 6%, Georgia 5% falls on countries Europe[26]
Baidu plans to pay for bitcoin mining on home PCs
In November 2017, it became known that the Chinese search giant Baidu offers Internet users money to use the free computing resources of their home computers and broadband connection to the Web in the operation of various Internet services. In particular, these resources should help platforms that are engaged in live streaming make content downloads faster and video display smoother. The service is called Baidu Jinkuang, which translates roughly as the "Baidu gold mine[27].
Baidu does not speak directly about this, but industry media, cryptocurrency experts and ordinary users in China are confident that the surplus resources of home PCs will also be used to mine bitcoins. In particular, Hu Yongjun, chief operating officer of the cryptocurrency platform Huangpu Community, is confident that "bitcoin mining can be one of the ways to apply," and that this "generates excitement to attract users, because bitcoin is now very popular."
However, not every user can become a member of Baidu Jinkuang. The computer must have at least a 16-core processor, at least 64 GB of storage and a broadband connection with a bandwidth of 1 gigabit or more. PCs will be connected to a peer-to-peer content delivery network, allowing owners to share unused broadband resources.
According to the online group of miners BitMiner, one average home PC can mine one bitcoin in 4.5 years. Despite the ban on bitcoin exchangers in China, mining is still not regulated there in any way, and it is also not prohibited to own cryptocurrency. According to the Center for the Study of Alternative Finance at the University of Cambridge, four of the five largest mining projects are located in China, and 70% of the computing power of the Bitcoin network is concentrated there.
Statistics of electricity consumption per mining compared to the consumption of countries
In July 2017, the DigiConomist portal published curious statistics showing how much electricity is spent by "miners" - people involved in mining cryptocurrencies or "mining."
All farms in the world involved in the extraction of Etherium and bitcoins consume about 19.23 terawatt-hours of energy per year, which is more than Syria, Iceland and Jordan. At the same time, cryptocurrency mining accounts for only 0.02% of global electricity consumption. It would seem that this is a small figure, but on the scale of large companies and regions it turns out to be huge.
According to DigiConomist's calculations, more than 1.25 million houses USA in can be powered by energy used in bitcoin mining. The entire network Visa of a financial corporation consumes 27 times less energy. The production bitcoin takes about 14.54 terawatt-hours of energy per year, the Ethereum figure is 4.69 terawatt-hours.
Curiously, one bitcoin generation transaction requires about 163 kilowatt hours of energy versus 49 kilowatt hours for Ethereum. If this is converted into energy for households, it turns out that one transaction in the bitcoin blockchain system in terms of the amount of electricity used corresponds to about 5.5 days of power supply to one house. Ethereum has this figure of 1.5 days.
Given that digital currencies have prospects for further rise in price, electricity costs will also grow. Ethereum is already working on changing the algorithm for obtaining evidence of work to improve energy efficiency.
In the China United States and countries Europe , giant factories are being created that are engaged in bitcoin mining on an industrial scale. Millions of their computers, using megawatts of electricity, are busy every day with only one thing - solving cryptographic problems. This can create a large load on local power systems. Ethereum's popularity is lower, but it also leads to a shortage of video cards on the market.[28]
How much energy is spent on mining bitcoins
Machines that generate bitcoins consume an incredible amount of energy. To determine its value and draw public attention to this problem, an Energy Consumption Index was created when mining bitcoins[29].
- Every year, bitcoin production consumes an average of 16.36 terawatts per hour.
- The annual global profit from mining is more than $3.5 billion.
- The average global mining costs for the year are more than $818 million.
- In terms of the amount of energy consumed, the production of bitcoins can be compared with Cuba.
- It takes 0.32 watts of energy to produce one gigahesh per second.
- One transaction requires 174 kilowatts of energy.
- The energy needed to generate bitcoins would be enough for 1.5 million American households.
- The energy consumed during one transaction would be enough to light 5.86 homes for one day in the U.S.
- Bitcoin production accounts for 0.08% of global energy consumption.
Chinese company wants to create a huge mining farm from household appliances
Midea The Group Corporation wants to integrate mining chips into household appliances and create a large-scale network for mining. bitcoins
Midea's patent application proposes installing mining chips in air conditioners, air dryers and televisions. After connecting to the network and the Internet, the equipment will begin to perform calculations for mining bitcoins. This should not affect the operation of the main functions of the technique. Therefore, mining starts only in the background when the device is not in use.
However, even in a very large TV, it will not be possible to install a chip with high processing power - it will warm up and consume a lot of energy. Therefore, Midea plans to install low-power solutions, but make this technique massive and create a huge mining network. So the company will be able to get an additional source of income, according to Coindesk[30].
Then the question arises - why would a buyer take equipment that constantly consumes electricity to perform other functions? Perhaps the company will come up with a new scheme for distributing household appliances and sell it cheaper than the market price, but compensate for the difference through mining.
2015: Largest bitcoin mining farms in China, USA, Iceland, Switzerland
For 2015, there are several bitcoin farms in the world, the largest of which is located in northeastern China, in the countryside of Liaoning province.
The owners of the farm are four people whose identities are unknown. Employees live and work in the plant building, who are almost not at home and are surrounded by incessant noise and rather high temperatures.
Vice journalists, who visited the largest farm in complete secrecy, got acquainted with the work of huge computers at a time when the price of bitcoin fluctuated around $375. It is currently just over $640.
All that journalists managed to find out: the farm's turnover was $1.5 million per month, which means that about 3% of the entire network is in the hands of four people.
Living much more modestly is software specialist Dave Carlson, who set up his farm Washington in a state on the Pacific coast. USA According to Carlson, debts forced him to take up bitcoins.
Washington state's own basement and low electricity rates allowed it to turn into a multimillion-dollar business owner in a year. According to the entrepreneur, his monthly expenses are about $1 million, but "pay off in full."
Another famous farm called Genesis Mining is located in Iceland. Its creators relied on a cold climate, because it is natural cooling that significantly reduces the cost of bitcoin in production. In addition, the country is famous for cheap electricity and fast Internet.
The creator of a bitcoin farm in Switzerland, Guido Rudolfi, is confident that cryptocurrencies are needed by the world, just as the Internet was once needed. Rudolfi has long been studying a new phenomenon, tried to create several farms and eventually stopped at the village of Lintal. The largest bitcoin farm in the country, of course, is located in the area with the cheapest electricity.
But despite the fact that at least two European cities have impressive farms, more than half of the capacity of the entire bitcoin network is concentrated in China. Here bitcoin farms are in the strictest secrecy.
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