The mining industry doesn’t seem to be concerned about the current price setback. On the contrary. The Bitcoin Hash Rate currently only knows one direction: north.
Kazakhstan is showing the way. The Central Asian state is giving cryptocurrencies a chance and opening up to Bitcoin Mining (BTC)
The minister responsible for digital development, Bagdat Mussin, is aiming for an investment volume of no less than 714 million US dollars (USD). The money is to be used to build a total of 17 BTC mines in the country.
Of course, Kazakhstan benefits from cheap electricity. Generated from the country’s rich oil reserves, it costs mining farms only about five cents per kilowatt hour (kWh). For comparison: In this country you pay an average of around 25 cents per kWh.
The move is the logical continuation of a crypto-friendly course that the country has been on for quite some time. After all, the country’s tax regulations allow income from Bitcoin mining to be kept tax-free – as long as it is not exchanged for fiat money.
Kazakhstan’s commitment to Bitcoin Evolution and Co. shows once again what it means to have a global cryptocurrency. Because while neighbor Russia is rather ambivalent when it comes to digital money , the Central Asian country is nailing it.
And that can be really worth it. With electricity costs in the lower cent range, the latest Antminer generation can generate a whopping 60 percent return at the current rate. The operating costs for mining a single BTC are currently around $ 5,000.
Another positive side effect of the location is its climate. For six months, parts of Kazakhstan have double-digit minus temperatures. The cooling of the devices is thus significantly cheaper.
Bitcoin mining is becoming more and more decentralized
The report falls at a time when Bitcoin mining is becoming more and more independent of China. The analysis portal BitOoda recently published a comprehensive reporton the status quo in terms of crypto mining. Accordingly, „only“ about 50 percent of the hash rate is currently in the Middle Kingdom. Previously, more than 60 percent was assumed.
China’s rainy season is sprouting hash rate
If the rain falls in China, not only flora and fauna flourish, but also the Bitcoin network. Because when the rainy season prevails in Sichuan and Yunnan from May to October, the dams swell; Electricity from hydropower is becoming one of the cheapest energy sources of all. Since electricity production far exceeds demand, the power plants are all too willing to sell their surplus energy to energy-hungry Bitcoin mines, which are sometimes located right next to the power plants. During the rainy season, mining farms can obtain electricity, in part, at low prices of 1 cent per kWh.
This regularly leads to increases in the hash rate and lower Bitcoin sales by miners, as operating costs decrease.
And in the future?
Greater decentralization in Bitcoin mining is good news. BTC was never under the control of the Communist Party, as some pessimists have claimed. Nonetheless, people were reluctant to look at statistics that show a large imbalance in the global distribution of hash rate.
The Bitcoin hash rate is currently around 120 exahashes per second.
According to BitOoda, this should double again in the next 12 months. Given the rapid growth of the accumulated computing power in the network, this is not a very steep thesis. The main reason for the optimism is the exponential growth of the ASIC computing capacity. Because if you don’t switch to the latest ASIC model, the Antminer S19, you might lose ground.
However, in order for the inventions to be worthwhile in the future, the price must rise at some point. Because with increasing competition in the mining market, the margins are getting smaller and smaller.
According to BitOoda, a price increase of 25 to 30 percent per year is enough for constant profitability. A conservative prognosis .
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