The Bitcoin (BTC) mining difficulty, a metric that measures the challenge of adding new blocks to the blockchain, soared to a record high of 142.3 trillion on Friday.
This mining difficulty has reached consecutive all-time highs in August and September, fueled by a surge in newly deployed computing power in recent weeks.
Bitcoin’s hashrate, representing the total computing power safeguarding the decentralized monetary network, also achieved an all-time high of over 1.1 trillion hashes per second on Friday, as reported by CryptoQuant.
The increasing mining difficulty and the persistent requirement for energy-intensive, high-performance computing to secure the network are making it tougher for both individual miners and corporations to compete, raising worries about the growing centralization of Bitcoin mining.
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Publicly traded companies are under pressure from governments and energy providers
Smaller miners and even publicly traded companies are encountering intensified competition from governments with access to free energy resources and energy infrastructure providers integrating Bitcoin mining into their operations.
Several governments, including Bhutan, Pakistan, and El Salvador, are already mining Bitcoin or investigating mining with surplus or runoff energy.
In May, the Pakistani government announced plans to allocate 2,000 megawatts (MW) of surplus energy for Bitcoin mining as part of its regulatory shift towards embracing cryptocurrencies and digital assets.
Energy providers in Texas are also incorporating Bitcoin mining into their infrastructure to balance electrical loads in conjunction with the Energy Reliability Council of Texas (ERCOT).
Electrical grids can experience a deficit of energy to meet consumer demand during peak times or excessive energy during low demand, which can harm the grid and pose risks if not managed properly.
Energy firms in Texas utilize Bitcoin mining as a controllable load resource to manage these electrical fluctuations, consuming surplus energy during low demand and shutting down mining operations during peak demand.
This approach generates profit for these energy providers without concerns about the variable costs of energy, providing them with a substantial competitive edge over mining corporations that are required to pay these costs.
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