Category: Bitcoin Mining

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Bitcoin May Consume More Power Than Australia in 2021

The amount of electricity needed to power Bitcoin increases every year. And a recent study has shown that Bitcoin network may soon consume up over 200 Terrawat hours (TWh) every year. To put that into perspective, The entirety of Australia consumed around 192 TWh worth of power in 2020.

Currently the Bitcoin network consumes 83 TWh of electrical energy, with this number suggested to continue increasing as calculated by the University of Cambridge’s model, setting the average electricity cost to 7 cents per kWh, would put the upper bound of Bitcoins annualised consumption up to 272 TWh.

Bitcoin electricity consumption (TWh annualised) – University of Cambridge

Environmental Impact

Most cryptocurrencies are now mined on huge “mining farms”, where racks and racks of specialized mining devices, high-end GPUs and the like run all day solving the complex equations that allow Bitcoins to be mined.

Concerns regarding the environmental impact of using this much power are not new. Neither are concerns regarding the amount of energy siphoned off of the power grid, to the point where some regions in China, for instance, have stopped providing power to crypto farmers.

According to a study carried out at Cambridge University, around 61% of Bitcoins are mined using petrol and other non-replenishable sources of fuel. The remaining 39%, however, are mined using renewable energy.

It seems this segment is even being advertised by certain companies. Daniel Roberts – the co-founder of an Australian firm involved with crypto mining named Iris Energy – stated that investors may be creating a market for “renewably-mined Bitcoins.”

“Our unique energy strategy and ESG (environmental, social and governance) overlay mean that we also satisfy investors with green and climate-related commitments. All of our operations today are powered by excess renewable energy.”

The power consumption rate of Bitcoin mining will only become thornier as the difficulty of mining increases – so a push for the use of green energy now may save the industry more trouble than if it were to be implemented later.

Bitcoin Cryptojacking

One unintended positive affect that has arisen due to the increase in power, it the decrease in the unauthorised Bitcoin mining on peoples computers – known as cryptojacking.

Although the number of complaints regarding cryptojacking software running in the background on your PC has gone down, that’s mostly due to the fact that the ever-increasing complexity of mining Bitcoins requires more and more power, making methods not worth the effort.

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Bitcoin Mining Crypto News Mining

Texas Turns to Bitcoin Mining – Goodbye Aluminum, Hello Cryptocurrency

There have been various crypto initiatives that started in Texas since 2017, and it seems that crypto-centered businesses are choosing this state as their home base.

In the meantime four mining facilities have been established in Texas, one of the instances was a small town called Rockdale which suffered massive economic losses due to the closure of the Alcoa Aluminum mine. A Bitcoin mining farm (Bitmain) then established itself in the town and aided the community by sourcing materials locally, job creation, and playing a role in the community.

Rockdale native and Bitmain project manager Clint Brown inside the former aluminum plant.

The Texas Bitcoin Rush

Northern Data Ag also building a 100-acre mining farm, as well as Layer 1 a mining startup, and the most recent by Argo Blockchain which will be running on the majority of renewable energy.

Klondike Gold Rush photo courtesy of PBS

Northern Data’s world leading Texas HPC data center is being constructed and expanded on an area of ​​more than 100 acres, which corresponds to the size of around 57 soccer fields.

Northern Data AG announces new 100 MW US customer

What Makes Texas so Attractive for Miners?

Texas has some of the lowest energy rates in the US which makes mining more affordable, and with a substantial portion of energy coming from wind turbines and natural gas so it’s more sustainable than states that rely mostly on fossil fuels. Yet due to the deregulated nature of the energy sector Texas does experience outages.

Yet the main reason for the influx could be due to Texas aiming to become the most favored state for blockchain innovation and investment in the US. A non-profit association of blockchain companies, Texas Blockchain Council, is working with legislators to promote blockchain initiatives, legislation, and in 2019 legislators passed two bills outlining the ability of local businesses to implement blockchain technology in bookkeeping and communications.

Texas has a long history of technological innovation and free-thinking entrepreneurs. We’ve now set our sights on becoming the jurisdiction of choice for investors, entrepreneurs, and enterprises to build and deploy blockchain technology applications and other emerging tech innovations.

Texas State Representative, Tan Parker

Even the availability of crypto ATMs in Austin and San Antonio where individuals can buy major cryptocurrencies shows the drive for crypto adoption.

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Bitcoin Bitcoin Mining Market Analysis Mining

On-Chain Data Suggests Bitcoin Miners Have Finally Stopped Selling Bitcoin

On-chain data suggests that Bitcoin miners have finally stopped selling their accumulated supplies of BTC. The recent dip in Bitcoin price was linked to miners selling their Bitcoin as China closes its mining operations.

The sell off may finally be over, as you can see from the graph below, the red indicates that the miners are now creating daily negative positions in terms of the BTC held in the miners blockchain addresses. And you can clearly see the rate of sales is declining.

Bitcoin Miner Net Position Change by Glassnode

The Miner Position Change metric factors in all balances for all newly minted coins and thus provides us with a big picture view on the full mining landscape.

Despite newly minted coins representing only a fraction of daily trade volume it appears that even miners are returning to neutral or accumulation mode.

The on-chain data suggests a relatively strong bull case for Bitcoin this week.

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Recent BTC Price Dip Linked To China Mining F2Pool Selling Off

China are shutting down some of their mining operations and mining group F2Pool, who have many mining farms in China, are transferring BTC out of their wallets frantically.

China to Ban Mining Operations

As quoted by CNBC, China’s Inner Mongolia region plans to ban crypto mining and shut down existing operations by April 2021 – due to high energy consumption.

If we take a look at the some of F2Pool mining farms locations we can see they are located in the Inner Mongolia region of China – the same place as the ban.

F2Pool Mining Farms in Inner Mongolia

As China start to head towards a cleaner ecosystem, they might ban the rest of the Chinese mining locations, and that accounts for around 65% of all bitcoin mining globally – which could have a short term impact on BTC.

F2Pool BTC Outflow

If we take a look at the data in the charts provided by CryptoQuant we can clearly see the massive outflow of BTC from F2Pool affiliated wallets.

BTC: F2Pool Affiliated Miners Outflow Source

This consistent massive outflow of BTC is not “normal” for a BTC mining pool. If we compare it to the Antpool group which has 11% share of the total BTC pools, it averages around 300 BTC outflow mark every few days. F2Pool which has 18% of the share, you would expect the outflow to be only slightly bigger, but at the moment you can see, its considerably bigger.

F2Pool Affiliated Miners Outflow – zoom in showing 14,000 BTC outflow for Feb 25

That giant outflow on Feb 21 could have sparked the the BTC dip, with futures contracts being liquidated causing a domino effect.

F2Pool Affiliated Miners Outflow – zoom in showing hourly outflow vs BTC price drop

It will be interesting to see if F2Pool release something official about closing operations in China. Stay tuned for more news.

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Australian Brothers Raise $25M for Bitcoin Mining Operation Thanks To Tesla’s Investment In Bitcoin

Iris Energy, which has raised $25 million from investors, has plans to triple the computing power in its mining operation in Canada, which is powered by hydroelectricity, to meet the growing desire for ‘green’ investments.

Following Tesla’s recent investment in Bitcoin, Elon Musk, has led the way for more investments into crypto mining, enabling Iris to grow from their one facility hosting computers drawing on 9 megawatts of power, and build another 21 megawatts in two new data centres.

Who Is Iris Energy?

Photo: Iris Energy Founders, Dan and Will Roberts

Started by brothers Dan and Will Roberts, Iris Energy receives regular income in bitcoin for its mining, which is immediately liquidated into fiat currency. It uses the raw computing power to find a solution to the SHA-256 algorithm that secures the bitcoin network. The amount of bitcoin received is linked directly to the amount of computing power. About every 10 minutes, 6.25 bitcoins are released to the minor that solves the problem and then provides security to the network, know as the ‘block reward’. Dan Roberts says:

We sell bitcoin the day they are mined. We don’t hold or keep it. This, and the focus on renewables and integration with energy markets, is one of the reasons it is popular with institutions.

At present, Iris represents 0.5 percent of the bitcoin mining activity. However, Dan Roberts believes this will shift after they invest in new application-specific integrated circuit (ASIC) SHA-256 machines. This is where renewable energy is helping them get ahead.

Tesla Leading the Way For Others

The Tesla investment comes after a flurry of interest from mainstream US financial institutions, including PayPal, Square and Visa. Lead portfolio manager at Wilson Asset Management, Oscar Oberg has made a small pre-IPO investment in Iris from its micro-cap fund. Oberg says:

“The growing US institutional interest in bitcoin, and Tesla’s huge investment this week, helped to validate the investment.”

Executive Chairman of Iris, Dan Roberts, who was Vice President at Macquarie Group in 2011, and then spent eight years at specialist infrastructure fund manager Palisade Investment Partners, says:

Tesla’s investment is another example of the institutional validation and interest we have seen over the past 6 to 12 months. In the current macroeconomic environment, the value proposition for a digital, scarce asset is gathering appeal.

The Future Of Green Mining

In the past 18 months, responsible investment has reached a tipping point, with sustainability concerns coming to the front for many institutional investors.

Investors, consumers and technology are aligning to accelerate the low-carbon transition, says Serge Colle, EY Global Energy Consulting Leader, creating the potential for outperformance by companies involved in the green economy.

Dan Roberts agrees with this shift. When it comes to bitcoin mining, it has moved away from those with access to the newest technology, to those who can build large-scaled energy and data centre infrastructure projects with access to institutional capital markets. And these institutional capital markets are going green.

Speaking on Iris Energy, Oberg says:

These guys are building data centres using the cheapest source of energy they can find, which is renewable, and they will have a lower cost of production to conduct bitcoin mining versus their competitors.

Dan Roberts says that if bitcoin reaches 20 per cent of gold’s market capitalisation, compared to a few per cent today, the energy demand to maintain the network would rise to 70 gigawatts. This is 10 times the level of bitcoin mining today, or three times the amount of power used by all of the world’s data centres. He says:

The operational flexibility in bitcoin mining makes it the perfect load balancing solution to energy networks dominated by intermittent renewables. With the ability to dynamically adjust energy consumption in response to market conditions and locate data centres in remote locations, bitcoin miners are logical users of excess renewable energy and can manage intraday load variability from wind and solar farms.

Get Involved

If you’re looking to invest in bitcoin mining, here’s everything you need to know about what it is. And if you’re a customer looking to invest into cryptocurrencies then checkout our review of NGS Crypto where you can invest in Bitcoin without any technical know-how.

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Miners Scramble For Semiconductors As Shortages Drive Rig Prices Up

A semiconductor shortage has been going on – to various degrees – for over a year at this point, affecting all industries dependent on them. Ford has shut down some plants, and the production of computer components has also been facing constraints. GPUs and the like are in short supply – and mining rigs are no exception.

Inventory Sold Out Nearly An Year In Advance

Bitmain – one of the leading cryptocurrency mining rig companies in the industry – has had their entire inventory sold out all the way up to August 2021.

The last remaining rigs have also greatly increased in price. For instance, the Bitmain Antminer S19 had a going price of $1897 per unit. The price has since skyrocketed and an Antminer S19 will now set you back $2767.

According to Alex Ao – the vice president of a semiconductor manufacturer named Innosilicon – there are simply not enough chips lying around to meet the growing demand after a great year for Bitcoin.

“There are not enough chips to support the production of mining rigs. These capacity expansions occurred even as Bitcoin went through its quadrennial halving that saw block reward subsidies cut in half. Thus, while China still dominates the global hash rate distribution, North American mining interests are reportedly “squeezing supply to China.”

The unfortunate side result of this shortage is that small-time cryptocurrency miners are being slowly pushed out of the market, as they are left without mining rigs to purchase in the wake of massive industrial-scale mining farms located in China and North America.

Big crypto mining farms are also facing their share of problems, however – for instance, authorities in the Chinese province of Yunnan ordered electricity producers to cut off the power supply to crypto miners.

What consequences the mining rig shortage may have on cryptocurrency prices remains to be seen – for instance, it may persuade more crypto users to HODL, knowing that the increased rarity of new blocks mined may drive the price of cryptocurrencies up in value.

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Crypto Market Cap Hits One Trillion US Dollars

The overall cryptocurrency market capitalization has reached one trillion US dollars for the first time in history, according to data from the leading crypto statistics site Coinmarketcap.com.

Major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) have seen exponential gains over the past few months, both rising by over 300% since November. Some smaller cap crypto assets and digital tokens like Chainlink (LINK), Cardano (ADA), and Polkadot (DOT) have enjoyed similar price rallies.

Bitcoin’s market valuation recently catapulted to $650 billion, overtaking major US investment firm Berkshire Hathaway, with a $533 billion market cap. Berkshire Hathaway was acquired and reformed in the 70s by iconic investor Warren Buffet, who remains its chairman and CEO to this day. Buffett has historically been very vocal about his dislike of cryptocurrencies, once famously calling Bitcoin “rat poison squared”. 

Despite Bitcoin being the best performing asset of the past decade by a large degree, Buffett continues to discount its worth, insisting that it has no value and is purely speculative. However, several major tech firms and financial institutions disagree, such as 170-year-old Mass Mutual which recently bought up $100 million worth of Bitcoin. A small amount compared to the world’s largest digital currency asset manager, Grayscale, with over $20 billion invested in crypto assets.

Image from Howmuch.net
Image from Howmuch.net

Criticism

Naturally, the extreme gains mean the cryptocurrency market has once again come under fire from critics who believe that asset prices are being manipulated. As with the previous 2017 rally, many critics believe that USDT tokens printed by stablecoin company Tether are being used to artificially prop up the cryptocurrency market – much like the US Federal Reserve props up traditional stock markets with seemingly endless USD issuance.

The concerns are not without merit, especially considering Tether’s continued reluctance to prove that it’s USDT tokens are fully backed by genuine dollar reserves. Tether has been minting millions of dollars in USDT tokens lately, presumably to meet the demand of consumers cashing out their Bitcoin profits or buying USDT as a digital onramp to the crypto world. Without clear and transparent auditing of this issuance, it’s fair to say the situation has the potential for abuse and manipulation.

One argument that challenges this theory is PlanB’s Bitcoin stock-to-flow model, which has accurately tracked the price movements of the BTC/USD trading pair over several years. The model reveals how the price of Bitcoin closely follows a set pattern dictated not by buyers or sellers but rather scarcity created by the algorithm which halves the BTC mining reward every 210,000 blocks. Price movements from the very first Bitcoin halving in late 2012 – long before Tether started printing in 2015 – correlate with Plan B’s stock-to-flow model. This suggests that the current price rally and the one following the previous 2016 halving are simply a result of Bitcoin’s coding rather than any external manipulation.

Image from PlanB (@100trillionUSD) on Twitter
Image from PlanB (@100trillionUSD) on Twitter
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Australia Bitcoin Mining Digital Asset Mining

Crypto Mining Rig Manufacturer Prepares To Launch Trading Platform

Back in October of 2020, China-based cryptocurrency mining machine producer Ebang established a full subsidiary in Australia, hoping to not limit themselves to crypto hardware exclusively. 

Australian Financial License Pending

Immediately after establishing an Australian subsidiary, the company set its sights on an Australian financial license. 

In recent years, China has been cracking down on cryptocurrency exchange platforms, a measure that tends to give investors cold feet. This prompted many China-based crypto exchanges to look for greener pastures, generally within the APAC region. 

Although Hong Kong used to be the main place to relocate for crypto firms, a combination of turmoil in Hong Kong and interest in fintechs by the Australian government has made Australia a prime location for crypto businesses looking for a new base of operations.

Mr. Dong Hu – the Chairman and CEO of Ebang International Holdings – stated that the interest in the Australian market comes in the wake of the special attention given to blockchain technology across Australia, both by the private sector and the government.

“We are pleased to announce that the Company has established its presence in Australia in furtherance of our strategies to launch a comprehensive blockchain-enabled financial business and capture the growth opportunity along the value chain of the blockchain industry. We are currently applying for the Australian financial service license in preparation for our global expansion.”

Yesterday, Ebang followed up on their previous press release, stating that they are looking to launch within the first quarter of the 2021 fiscal year. 

Not many details have been shared about the tentative launch – except that it will not operate within mainland China at all. 
Although it is not clear whether the financial license requested by the company has been granted yet, the press release indicates that all procedures are at least well on track.

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Bitcoin Mining Digital Asset Mining Payments

AMD Might Be Hopping Back On The Crypto Mining Hype Train

It’s been quite a week for cryptocurrency miners and investors alike. A new bullish trend focusing on Bitcoin has taken the main cryptocurrency to its highest point in almost a year — it’s passed $18,400 AUD so far. 

The bombshell that started the growth trend was PayPal announcing that they are getting into cryptocurrencies, launching the payment option in the USA, and planning to roll it out to Europe and Australia — among other locations — starting in 2021. 

Just 2 days later, a source that requested to remain anonymous revealed that PayPal is in talks with Bitcoin custodian BitGo —  a company valued at USD 178 million — backed by world-renowned financiers such as Goldman Sachs, Valor Equity Partners, and Founders Fund. 

The source also revealed that PayPal seems intent on buying another crypto custodian if the deal can’t be hashed out, indicating that this wasn’t a decision made on a whim. 

Interest In Mining Picks Up Again

Meanwhile, Ebang International Holdings — a company specializing in professional crypto mining rigs — just established a subsidiary in Australia, and are currently waiting for a financial license from the authorities before opening up. 

Cryptocurrency mining rigs can be prohibitively expensive for the budding crypto enthusiast — and the reason why many turn to online mining platform solutions.

A few years back, however, the majority of cryptocurrency enthusiasts mined digital currency using the graphics card in their own desktop. Although they weren’t able to keep up with the higher cost of electricity needed to mine, some continued the practice —  and for them, AMD might have an ace up the sleeve. 

Next week, the AMD Radeon RX 6000 “Big Navi” graphics cards tech specs should be unveiled. 

Data mining has revealed a “navi10 blockchain SKU” while looking through the Linux drivers for the new graphics card, hinting at a dedicated cryptocurrency mining GPU for personal use —  or at least support for this use of hardware generally reserved for gaming. 

With the emergence of a world-class mining rig producer on the Australian market, the renewed interest by payment-processing juggernauts, and more, crypto investors will probably be coming into the spotlight far more than previously.

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Multi-Coin Digital Asset Mining Could Catapult Institutional Investors Portfolios

Following Square Inc’s recent purchase of $50 million dollars worth of Bitcoin, we are starting to see large investors diversifying their portfolios with the addition of Cryptocurrency.

Square’s reported assets in 2019 totalled over $4.5 Billion so it’s a dip in the water for them, but more institutions are expected to follow. And according to a recent report by Fidelity 36% of large investors already hold Bitcoin in their portfolios.

Large Investors are buying Gold and Bitcoin

Also recently, Jason Urban former Goldman Institutional Trader stated that large investors now buying Bitcoin and Gold at same pace.

“As someone dealing in the institutional space, the same people that I see buying gold and other precious metals are also buying Bitcoin and they’re doing it simultaneously and they’re doing it in equal amounts currently.”

DrawBridge Lending CEO Jason Urban

Why Multi-Coin Digital Asset Mining?

While you can buy Bitcoin outright, it has been proven that Bitcoin mining is far less risky and much less volatile option to diversify your portfolio.

Multi-coin mining also spreads your risk and volatility across multiple popular digital assets including Ethereum (ETH), Litecoin (LTC), Zcash (ZEC) and others. Essentially by adjusting the mining focus based on the rewards and difficulty of the coin to get optimised profit.

The Catapult for Institutional Investors into Bitcoin

Big names in business and crypto are predicting a wave of institutional investment for Bitcoin following Squares $50 Million purchase in October 2020.

First, it was @michael_saylor and publicly traded @MicroStrategy buying $425million of #Bitcoin. Today, it is @jack and @square buying $50million of bitcoin. Tomorrow, it will be another visionary leader, and another, and another…the tsunami is coming

Tyler Winklevoss – Gemini CEO and Bitcoin billionaire

Institutional Investors in Australia

Cryptocurrency mining for Institutional Investors in Australia is provided by NGS Crypto. They offer investments upwards of $1 million USD in a multi-coin digital asset mining programs, which return up to 15% yearly* on investment and 100% full return of upfront cost after 36-month term. *See their website for full terms and conditions.