Rising hash rates on the Bitcoin (BTC) network are causing problems for mining companies, but could be rolling out the red carpet for energy giants.
Bitcoin’s hash rate, the amount of computing power given to the blockchain through mining, has hit another all-time high. According to Blockchain.com, the metric reached an all-time high of 267 exahashes per second (EH/s) on November 1, after rising nearly 60% since the beginning of the year.
Commenting on the new peak, Capriole Fund founder Charles Edwards speculated that highly efficient government and oil companies were getting into the mining game at scale.
New Bitcoin hash rate world record! 9% higher than the prior all time high set just a few days ago.
I have no doubt that we have serious, highly efficient government & oil company enterprises entering the mining game at scale as we speak. pic.twitter.com/YBSswwvK59
— Charles Edwards (@caprioleio) November 1, 2022
A new Bitcoin hash rate world record has been reached. It is 9% higher than the previous all-time high set a few days ago. I have no doubt that serious and highly efficient government and oil companies are getting into the mining game at scale as we speak.
He added that this was bullish and not a sign of capitulation by the miners. However, in the short term, he could be considered bearishas miners sell coins to cover their expenses and stay in business.
This scenario would lead to a hash rate stagnation or drop that has yet to be seen, which adds more weight to the premise that other entities are deploying the platforms.
“The oil majors will certainly become major players,” Edwards said.
It seems that the great influence of oil is already happening.
Earlier this year, it was reported that ExxonMobil has been working with Denver-based Crusoe Energy Systems to mine bitcoin in North Dakota. In June, it was reported that the oil subsidiary of Russian natural gas giant Gazprom will provide energy to mining company BitRiver.
The use of energy from burning gas, a wasted by-product of the oil industry, has increased to fuel bitcoin mining.
Earlier this month, Argentine state-owned energy company YPF declared that it would convert waste energy from gas combustion into energy for cryptocurrency mining.
These are just a few examples of the influence Big Oil is having over bitcoin mining, and it is likely to increase in the future. As early as 2020, Cointelegraph reported that oil companies could dominate BTC mining by 2025.
Companies that rely on bitcoin mining as their sole business and source of income are struggling right nowas block mining becomes more and more competitive, energy prices skyrocket and hash price or profitability plummets.
Just this week, mining giant Argo Blockchain announced a restructuring of its business strategy and the details of its mining hardware sale. Last week, bitcoin miner Core Scientific filed forms with the United States Securities and Exchange Commission (SEC) warning of possible bankruptcy proceedings.
The depressed price of bitcoin, which is down 70% from its all-time high, is not making things easy for bitcoin miners.
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