At a time in history when the crypto market is in the midst of an adolescent crisis between marketplaces that are jumping and a Bitcoin that is holding its own despite the situation (showing great strength and solid foundations) mining remains a tool that knows how to attract resources but there are also those who abandon the practice.
Bitcoin mining: how it works and why it matters
Bitcoin mining involves digging up hashes (specific codes) that will be used to confirm new blocks to be added to the blockchain.
The Hashrate Index is the index that keeps its finger on the pulse of the mining operation. Every quarter, this index takes a snapshot of the situation and recently released the one for July, August and September.
The report shows how hashing is paid less and less and how the rising cost of energy delineates an unfriendly picture for those who engage in mining.
Despite this, on October 31 there was a peak hourly high of 304 Eh/s when BTC had begun its descent below $20,000 bringing it to the current US$16105.
In this context, there are those who bet everything on mining which is considered very profitable nonetheless. This is the case of Arkon Energy for example, which in the words of CEO Josh Payne describes the moment thus:
“The current market climate, with low prices for Bitcoin and mining equipment, offers an attractive opportunity to leverage our unique profitability and access to growth capital.”
Arkon Energy is a Sidney, Australia-based renewable data center infrastructure company.
With a fundraising drive, it has grabbed as much as $28 million in order to further invest in Bitcoin mining with renewable energy despite the current market crisis.
Following this run of resources, the company purchased Norway’s largest data center, Hydrokraft AS to set up a “vertically integrated green Bitcoin mining platform.”
Unfortunately, on October 6, the country’s government-backed a proposal to repeal the tax containing costs on electricity in mining that had been in effect since 2016, but this did not put Arkon Energy off.
As well as Arkon, China’s BTC Canaan has also recently communicated its willingness to expand its BTC mining capacity with global investments by also investing large sums in research and development.
Shell, one of the seven sisters in hydrocarbons and energy in general is going in the same direction by focusing on mining support.
The oil company has signed a two-year sponsorship with Bitcoin magazine for a think talk on cryptocurrency mining.
The agreement also stipulates that at the Bitcoin Conference, Shell will present innovative cooling solutions aimed at optimizing the Bitcoin mining process.
Shell Lubricants’ Head of cooling and immersion, Darin Gonzalez, said:
“Shell Lubricants is committed to providing customers with carbon-reducing alternatives, and one of the most important benefits of immersion coolant is sustainability and renewable energy.”
For a world that invests heavily in mining, there are also those who row against it and those who lick their wounds.
Quebec’s energy manager for example (Canada) has applied to the region’s government for a power cut to all those companies involved in cryptocurrency mining in a bid to save energy in times of crisis.
Not only proposals to pull the plug but also resounding about-faces after things went wrong.
The case of BTC Iris Energy testifies precisely how mining does not always bring good luck.
The company is facing a $103 million insolvency filing against U.S. investors.
The SEC explained that the company missed the restructuring and failed to repay the investors on the agreed deadlines.
The Kremlin is also not looking good for mining; in fact, it is well known that a month ago the Duma scuttled the bill on mining digital currencies proposed by the New People party.
“On Mining in the Russian Federation” is the name of Bill No. 127303-8 that was aimed at regulating mining in the transcontinental country but apparently Moscow will still have to wait.