A hive of activity in 2019 has surrounded Bitcoin, and this has translated into a price rise for the leading crypto asset on the markets. Bitcoin mining power reached a new record high as miners come online to participate in the booming trade of the cryptocurrency.
New powerful machines come online
The last three months have seen several powerful mining machines come online on the Bitcoin network. It is estimated that about 600,000 powerful machines have come online during this period, and this has led to an increase in Bitcoin’s hash rate.
According to BTC.com, the two weeks average hash rate for Bitcoin reached 85 exa hashes per second, as of Friday the 13th at 19:00 UCT. Mining difficulty also reached a new record of nearly 12 trillion. This is a 60% increase in both figures since the 14th of June, 2019.
Mining difficulty refers to the measure of how difficult it is to create a block to form a block of transactions. Bitcoin mining difficulty shifts after every 2,016 blocks, which is an average of every two weeks. The aim is to ensure that the time it takes to create a block remains around 10 minutes.
The hash power carried by Bitcoin mining machines fluctuates as miners compete to complete transactions on blockchains, but the time it takes to create a block needs to remain as constant as possible around the 10-minute mark.
ASIC machines come online, possible billion-dollar business
Over the past three months, several new kinds of application-specific integrated circuit (ASIC) mining machines came online. These machines have an average hashing rate of 55 tera hashes per second (TH/s), and this has considerably increased the total mining power dedicated to Bitcoin. A rough calculation reveals that there might be about half a million new mining machines that have joined the Bitcoin network over the last three months.
Most of the machines used in Bitcoin mining come from companies such as InnoSilicon, Bitmain, MicroBT, and Cannan. These significant manufacturers of Bitcoin mining equipment sell their products at between $1,500 and $2,500 per unit. If half a million of these were added to the Bitcoin network, it means these leading manufacturers have made over $1 billion in revenue over the last three months.
The rising price, rising demand, rising need for mining power
The increase in the need for more mining power on Bitcoin’s network comes after a surge in the crypto asset’s price over the year. The price rise has attracted more traders to the cryptocurrency, and this has influenced a spike in hash rate and mining difficulty. The increase in hash rate led to a growing demand for Bitcoin mining equipment.
China carries the world’s highest mining power, and most of the mining farms are situated in the country’s southwestern regions. Miners in these areas make use of cheap hydroelectric power, and high rainfall over the summer has made this electrical power even less expensive. Miners in the country estimate that their hash rate could break the 70 EH/s mark in the summer.
There is also raising demand for equipment from mining farms in Russia’s Eastern Siberia region. These farms are making use of the Brastsk hydropower plant which was constructed during the Cold War era. These mining farms in Russia are said to carry about 10% of the total mining power on the Bitcoin network.
Most of the major mining equipment manufacturers have sold out on their stock, and their customers are placing pre-orders for more equipment three months in advance. Bitcoin’s hash rate, mining difficulty, and the price will likely continue to rise as a result.
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