An in-depth look into the latest advancements and current challenges in crypto and bitcoin mining, sponsored by Foundry.
Mining is critically important in crypto. It’s the financial infrastructure of blockchains, especially Bitcoin. Global networks of distributed “trust machines” ensure decentralization and lay the plumbing for an open internet.
So how healthy is bitcoin mining in mid-2023?
The answer, according to a series of stories for CoinDesk’s Mining Week, is healthy, mostly.
As George Kaloudis explains, Bitcoin’s hashrate, a measure of the amount of computing power committed to running the network, is up five-fold in the last year. Meanwhile, many of the publicly-traded miners are showing impressive profits, driven by strong demand for bitcoin, higher asset prices and shrewder strategies to lower energy costs, hedge risks and find additional revenue, whether that’s from demand response programs (like Texas’s) or diversifying into AI.
Having said, the industry faces strong headwinds going forward.
The next halving, likely to occur next April, will halve the rewards available for mining single bitcoins. And then there’s the whole question of the environment and its high energy needs. While the industry has made big strides to integrate itself to renewable power systems and use up excess energy (like natural gas that would normally flared), many critics simply can’t accept that bitcoin mining is a legitimate use of electricity at a time of escalating climate change. Some states have worked to ban mining as a result, albeit not very successfully.
Going forward, the crypto mining industry will continue to be cyclical, buffeted by large uncontrollable forces, from the bitcoin price to energy costs. The industry will continue to play a key role in building a decentralized economy, but it won’t be easy. The last decade shows that mining at scale isn’t for the faint of heart.
Through It All, the Bitcoin Mining Industry Looks Set for Growth
Though the Bitcoin halving will reduce rewards for miners, the prospects for the industry remain bright and innovations like Ordinals promise more demand for miner services in the future.
Crypto Miners Are Pivoting to AI (Like Everyone Else)
Miners are repurposing their cooling systems, security and access to cheap energy to take advantage of the AI boom. ASIC machines are harder to convert.
How Texas Became a Global Mecca for Bitcoin Mining
Miners have flocked to the state since China banned mining in 2021, encouraged by cheap energy, grid incentives and an alignment of values. “Bitcoin is all about freedom,” says one miner. “And in my dealings with the utilities and the regulators, Texas is all about freedom.”
Ghost From the Well: Is Crypto Mining With Associated Gas Better for the Environment?
Oil and gas companies are keen to use gas that would normally be flared off to run bitcoin mining operations. But environmentalists claim the practice merely perpetuates the use of fossil fuels.
Oil and gas companies are keen to use gas that would normally be flared off to run bitcoin mining operations. But environmentalists claim the practice merely perpetuates the use of fossil fuels.
