The Bitcoin (BTC) mining difficulty, a metric that tracks the relative challenge of adding new blocks to the ledger, climbed to a new all-time high of 142.3 trillion on Friday.
Mining difficulty hit successive all-time highs in August and September, driven by an influx of freshly deployed computing power over the last several weeks.
Bitcoin’s hashrate, the average of the total computing power securing the decentralized monetary protocol, also hit an all-time high of over 1.1 trillion hashes per second on Friday, according to CryptoQuant.
The rising mining difficulty and the constant need for energy-hungry, high-performance computing power to secure the network are making it harder for individual miners and corporations to compete, raising concerns that Bitcoin mining is becoming increasingly centralized.
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Publicly traded companies are facing the heat from governments and energy infrastructure providers
Smaller miners and even publicly traded companies are facing rising competition from governments, which have access to free energy resources, and energy infrastructure providers that can vertically integrate Bitcoin mining into their business operations.
Several governments are already mining Bitcoin or exploring mining with excess or runoff energy, including Bhutan, Pakistan, and El Salvador.
In May, Pakistan’s government announced plans to allocate 2,000 megawatts (MW) of surplus energy for Bitcoin mining, as part of the country’s regulatory pivot embracing cryptocurrencies and digital assets.
Energy providers in the US state of Texas are also integrating Bitcoin mining into their infrastructure to balance electrical loads in collaboration with the Energy Reliability Council of Texas (ERCOT).
A chart showing the reduction in energy usage of crypto miners in Texas during times of peak demand from 2021-2023. Source: ERCOTElectrical grids can suffer from a lack of energy to meet consumer needs during peak demand or too much surplus energy during times of low consumer demand, which can damage the electrical grid and pose a danger if not properly redirected.
Energy companies in Texas leverage Bitcoin mining as a controllable load resource to balance these electrical discrepancies, consuming excess energy during times of low demand and turning off their mining rigs during times of peak consumer demand.
This creates profit for these electricity providers without them worrying about the variable cost of energy, creating a significant competitive advantage over publicly traded mining corporations that must pay.
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Source: https://cointelegraph.com/news/bitcoin-mining-difficulty-all-time-high-centralization-fear?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
