BT Daily News: Bitcoin mining difficulty shoots up 9 percent, experts say it’s a good sign despite woes to miners
Bitcoin mining difficulty shoots up 9 percent, experts say it’s a good sign despite woes to miners
Mining difficulty has also increased in the second half of August, as per a report by BTC.com. Mining difficulty is measured on a scale of 0 to infinity, and on August 31, the mining difficulty stood as 30.97 trillion. This figure represents a 9.26 percent increase since August 18, when the mining difficulty stood at 28.35 trillion.
However, while it will cause some immediate pain for miners, the increased difficulty is good for the network in the long run. It signals added participation in the mining process, which results in higher security for the Bitcoin network.
"A difficulty increase is an indicator of a strong and growing network, it's actually a good thing," said Co-Founder of Bitcoin miner LSJ Ops, Scott Norris, to Decrypt. Therefore, increasing mining difficulty should be seen as a positive sign, whereas "difficulty shrinking is the cause for concern."
Crypto Researcher Says Post Ethereum’s Merge, Bitcoin Could Be ‘Regulated Away’
Independent crypto researcher Kyle McDonald explained why Bitcoin could get even more attention from regulators — due to its high energy consumption — after Ethereum’s Merge upgrade has been completed.McDonald thinks it is better to sell Bitcoin now because the Bitcoin price may crash if it gets banned by regulators. And the reason McDonald is worried about Bitcoin getting Bitcoin after the Merge is that Ethereum’s switch to the much more energy-efficient PoS consensus might make regulators think that maybe PoW was never essential.
Bitcoin mining’s huge energy consumption, and lack of any evidence that Bitcoin is highly unlikely to switch to the more environment-friendly PoS consensus could put pressure on regulators to ban Bitcoin, and that in fact Bitcoin could become the first cryptocurrency “to be regulated away” (at least in certain jurisdictions, such as the U.S. or the European Union).
McDonald also mentioned that he believes Ethereum Foundation’s claim about the Merge reducing Ethereum’s energy consumption by 99.95%: “When you’re moving from a system that is about generating as many random numbers as fast as possible with 10 million [graphic processing units] across the world, to a system that’s running on a few thousand computers that are pretty low energy, it’s going to make a huge difference.“
Repurposing Bitcoin mining heat can solve global energy crisis: Arcane
The flexibility behind running Bitcoin (BTC) mining operations can be vital to solving the real-world problems that stand in the way of the energy industry, suggests Arcane research.
Owing to low cost of reacting, Bitcoin mining complements the growth of wind and solar grids, which often produce unstable and non-controllable energy. Arcane research points out that the Electric Reliability Council of Texas, to date, has only allowed bitcoin miners to participate in the most advanced demand response programs.
In addition to being flexible to grid demands, Bitcoin mining can also help solve issues related to gas flaring — the process of burning natural gas associated with oil extraction.
Bitcoin mining can further help the energy industry by repurposing its byproduct — heat — to heat up homes, industries, and other applications during the coming winter. It is important to note that heating accounts for roughly 40% of the world's CO2 emissions.
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Could Texas become a model for crypto mining regulation?
ERCOT’s permitting process for interconnecting large industrial energy users to the power grid has slowed the expansion of crypto mining operations in the state. It’s also created a framework for managing their energy consumption.A lot has changed in crypto. The price of Bitcoin is not where it was at least six months ago. A lot has changed in Texas as well. There is energy still in Texas, but it’s not perhaps so readily available.
It’s not that ERCOT has said, “we don’t want mining” or other types of large flexible loads. And while they’re figuring out these rules, which do not exist anywhere in the world, they perhaps were like, “OK, we need to slow down,” because their numbers say 33 gigawatts of mining wants to be connected to the Texas grid, which is a lot of energy.
We’re going to see now is sort of slower investment, like mature investors being in the space, people who are willing to wait one year, 18 months for their projects to come to fruition and be operational. ERCOT is going to play a large role in figuring out these rules, figuring out how miners can be an asset to the grid, and if they do a good job of that, that’s going to be used as a blueprint for other grids around the world. And that’s really exciting in a way.
Iran Starts Licensing Crypto Miners Under New Regulatory Framework
The government of Iran has reportedly started issuing licenses to crypto miners under the new “comprehensive and detailed” regulatory framework approved last week. The authorities previously issued licenses to a number of crypto mining operations but halted the process due to power consumption and illegal mining issues.A pair of licenses are needed before an entity can start mining cryptocurrencies in Iran: an establishment license and an operating license. The former establishes the entity as a legal crypto miner while the latter allows it to actually start crypto mining.
Sharing some details of the newly approved crypto regulatory framework, Mohsen Rezaei Sadrabadi, secretary of the government’s working group on cryptocurrency, said that mining centers can now apply for a license and use mined cryptocurrencies to pay for imports.
He explained that the Ministry of Industry, Mine, and Trade is responsible for issuing licenses to crypto miners, adding that the new regulatory framework has provisions that address large-scale crypto mining operations. There are also provisions about energy supplied to the mining industry, with renewable energy as a priority.
In addition, Rezaei Sadrabadi noted that the government has decided to make the central bank the primary regulator of the crypto sector. However, he believes that crypto regulation should be multi-dimensional and one regulator should not oversee the entire sector as the crypto ecosystem comprises more than just cryptocurrencies.