The achievement occurs nearly 12 years after the first block, which contained 50 Bitcoins and was mined on January 9, 2009, was reached.
After Ethereum transitioned from Proof-of-Work to Proof-of-Stake, Bitcoin has taken over all cryptocurrency mining.
Only Dogecoin, Litecoin, Ethereum Classic, Monero, Bitcoin Cash, Bitcoin SV, Zcash, and other less popular cryptocurrencies may now be mined in addition to Bitcoin. It suffices to point out that the combined market value of the aforementioned cryptocurrencies is sixteen times more than that of Bitcoin.
In other words, Bitcoin dominates the cryptocurrencies that are still mineable by more than 90%.
As a result, when we discuss cryptocurrency mining, we are primarily referring to Bitcoin mining, with the other Proof-of-Work based coins serving as a supporting cast.
New record high for bitcoin
The hashrate for Bitcoin reached a new record high yesterday.
It is easy to use the weekly average as a baseline for comparing the evolution of the hashrate over time since it is an estimate that is generated using block-time and difficulty rather than an actual number that is directly derived from mining operations.
The weekly average hashrate of Bitcoin surpassed 320 EH/s for the first time ever the day before yesterday, and yesterday it reached a new record high of 323 EH/s.
It is important to note that, exactly because of the recent increase in hashrate, Bitcoin’s block-time dropped below 10 minutes in February after reaching a peak of over 12 and a half minutes in late January.
The weekly average was slightly under 300 EH/s at the end of January, but it has already surpassed 300 since the middle of February. The block time even decreased to 8 minutes on February 16.
When looking at daily statistics, the biggest peak actually happened on February 16 at 342 EH/s, while the highest hourly peak also happened that day at 383 EH/s.
The hashrate was below 270 EH/s at the beginning of 2023, therefore in these first weeks of 2023 it has climbed by about 20%, whereas a year ago it was at approximately 200 EH/s, using the weekly averages as a point of comparison.
Health of cryptocurrency mining
In December 2022, it appeared that crypto mining was in poor health because, despite continuingly high costs, profits were insufficient. For instance, Core Scientific was compelled to declare bankruptcy.
Yet it appears that many of the issues have been rectified since the price of BTC has risen back beyond $20,000 in recent days.
It is important to keep in mind that miners receive payments in Bitcoin, and they frequently receive the same payments over time, which roughly halves every four years.
As they are compelled to sell the BTC they have cashed in in order to cover their extremely high expenditures, notably the enormous amount of power used, if these have a lower market value then essentially the miners’ profits fall.
On the other hand, when the market value of Bitcoin rises, the realised gains of the miners also rise, allowing them to turn on less powerful equipment once more or even purchase brand-new, more powerful ones.
So, the facts seem to indicate that the tragedy that was predicted in December did not ultimately occur, even if someone nonetheless paid a price. The cryptocurrency mining sector now appears to be in excellent shape, in part because Texas, a US state, seems to want to support it.
American cryptocurrency mining
The US has held the title of the nation with the highest hashrate allocation on its soil for a number of years.
Yet, not all US states treat mining in the same way. In fact, in regions where power is inexpensive, like Texas, it is viewed more as a business opportunity, but in other states it is considered as a problem due to excessive energy use.
Nonetheless, it appears that the former are outweighing the latter based on the statistics coming from this sector.
The Mining Rigs coupon market
The fact that BitFuFu has officially launched the Crypto Mining Rig coupon market is another proof that this industry is on the rise.
The famed Antminer’s manufacturer, Bitmain, is a partner of BitFuFu, a cloud mining business, and it has now established a market for discounts on rigs bearing the Antiminer name that are specifically made by Bitmain.
These coupons were in fact granted last year, but they have not been utilised as of yet since the miners did not have enough money to buy new machinery.
Instead, because the market is now prepared to use them, BitFuFu yesterday officially established the trade platform for these vouchers.
Therefore, miners now have the money to purchase better, more potent, and effective equipment that can produce more hashrate for the same amount of consumption thanks to the huge increase in the price of BTC in January.
So, it is not unexpected that the worldwide Bitcoin hashrate has resumed growing and reached new all-time highs as of this same month of February.
Costs of mining cryptocurrencies
While high power costs are the main expense associated with cryptocurrency mining, they are not the only one.
In addition to the potential acquisition of more powerful equipment, cooling is another significant expense because these machines generate a lot of heat that needs to be eliminated. Due to the ease of cooling them, many mining farms are situated in cold climates.
Also, it’s important to remember that mining farm equipment and infrastructure require ongoing maintenance and repairs, which pushes expenses to levels that are difficult to sustain if revenues fall.
This makes it easy to comprehend why 2022 was a bad year for crypto mining and why 2023 is seeing a recovery in the sector.
As a result of significant industry initiatives that have the potential to eliminate smaller miners, competition in this sector has also significantly grown in recent years.
Yet, it is important to keep in mind that the biggest miners are pools, which are companies that operate internationally and enable several miners to combine their computer resources to increase their chances of mining BTC.
In fact, it is important to remember that mining is a competition in which there is only one set prize available every 10 minutes. This prize is given in a block to the one miner, or one pool, who is successful in confirming a block.
This makes it also understandable why mining for other cryptocurrencies, like Dogecoin, Litecoin, or ETC, is now mostly reserved for large companies and mining farms rather than individual miners (Ethereum Classic).