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Bitcoin miners are pushing hash rates to new highs to tackle highest network difficulty ever

Bitcoin miners are pushing hash rates to new highs to tackle highest network difficulty ever
Photo Credit: Pixabay
20 Apr, 2022
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New generation application-specific integrated circuit (ASIC) rigs, purpose built for Bitcoin mining, are offering higher hash rates than ever before, thereby increasing the profitability chances for Bitcoin miners around the world. Alongside higher power, these rigs also claim to offer greater efficiency than before, which would purportedly answer two of the biggest concerns regarding crypto mining for tokens that work on the proof of work (PoW) concept – pollution and power consumption.

Among these new generation Bitcoin mining rigs are the likes of Bitmain’s Antminer S19 portfolio and fellow Chinese brand Microbt’s Whatsminer lineup. The latter includes the Microbt Whatsminer M50 and M50S, which were unveiled recently by the company at the Bitcoin 22 conference in Miami, USA earlier this month. The flagship Whatsminer M50S offers 126 terahash per second (TH/s) mining rate at 26 joules per terahash (J/TH) efficiency rate, and 3,276W power consumption.

From Bitmain, the Antminer S19 XP claims to offer 140 TH/s mining power, while the S19 Pro+ Hyd offers 198 TH/s.

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Through such miners, the profitability at present BTC prices have soared. As per CryptoCompare’s BTC mining profitability calculator, the Whatsminer M50S can offer 150% profit ratio per day – or $1.5 earned per $1 spent in the entire mining process. Bitmain’s Antminer S19 XP projects a profit ratio of 198% at the time of publishing, with BTC price at just under Rs 31.75 lakh (slightly over $41,500).

Such higher power Bitcoin mining rigs now seek to offer a path back to profitability for miners, even as the mining difficulty of Bitcoin is at an all-time high. At the time of publishing, the network difficulty of Bitcoin was at 28.226 trillion, according to Blockchain.com. As per YCharts, the BTC hash rate was just over 175 EH/s (exahash per second).

To be sure, while crypto mining is not explicitly banned in India, the import of ASIC devices are restricted in the country – thereby effectively banning the legal import of such mining rigs in India.

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The ‘difficulty’ of a blockchain token is known as the amount of time that it takes for a transaction on the blockchain network to be validated, while the hash rate refers to the amount of computing power required for the same. ‘Mining’ in cryptocurrency parlance refers to the process of verifying and adding new transactions to a blockchain in order to bring a cryptocurrency token into circulation. In crypto mining, higher difficulty and hash rates typically signify a more secure, private and resilient blockchain network.

The process involves use of specialised hardware, which is where ASICs come into the picture. These chips, which are purpose built for mining crypto tokens that use PoW to validate a blockchain transaction, have evolved to use smaller die sizes to scale up efficiency and increase performance by packing in more transistors per unit area.

Today, this gives miners more power than before – at greater claimed efficiency, too. While the claim is yet to be validated, Microbt’s chief operating officer, Jianbing Chen, said that the company’s latest ASIC rigs can offer 2x J/TH energy efficiency in comparison to its older generation rig. Such measures are being lined up as answers to the efficiency plight for blockchain networks such as Bitcoin, which work on a PoW model.

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The latter requires computing power in large quantities to validate a transaction on the blockchain network, which has thus been labelled as being against environmental concerns. Notably, after electric car company Tesla started accepting BTC for car buying, the company’s chief executive, Elon Musk, had announced last year that Bitcoin token payments are being paused until its draw on conventional energy resources are reduced.

Stakeholders in the mining industry opine that the energy consumption of ASIC rigs do not always mean heavy draw on fossil fuels, or high pollution factors. Ben Gelfand, chief executive of Canada-based public crypto mining company Bluesky Digital Assets Corp, told Nasdaq last month, “It depends where you mine. If you mine using hydroelectric power, then your carbon footprint is small.”

While the growth in mining power and efficiency for ASIC Bitcoin mining rigs is good news for miners around the world, the rise in difficulty rate poses a key challenge. Reports, however, suggest that the difficulty rate would only continue to grow as miners increasingly take to the new, more powerful mining rigs that promise higher profitability – and even claim to be compliant with environmental, societal and corporate governance (ESG) concerns.

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