The relentless growth of Bitcoin’s hashrate, or the computing power of the network, may eventually slow, bringing relief to miners as extreme summer heatwaves force a reduction in some operations exploit.
Miners have seen their profit margins squeezed in an already overcrowded industry after the halving reduced their mining rewards by 50%, while hashrate continues to reach new highs.
One of the main reasons for the hashrate growth is that previously purchased miners are coming online, and miners have had to rush to upgrade their fleets with more efficient miners to maintain profit after halving. For example, on May 25, hashrate climbed to a record high of 658 exahash per second (EH/s), according to Luxor’s Hashrate Index data.
However, this continued growth is expected to slow in the next few months as North America enters summer and its accompanying heat waves. Miners use extremely powerful machines and generate a lot of heat as a result of their calculations. “The top operational challenge for Bitcoin miners is cooling,” Blockware Intelligence analysts said. “ASICs are large, powerful computers that can reach very high temperatures without proper cooling.”
Mitigating this heat becomes a bigger problem during the summer when companies need more energy to cool their machinery and/or have to shut down operations due to high demand from energy consumers turning on the air conditioners. . “Many miners have had to reduce operations [trong các tháng mùa hè] partly due to overheating, but also due to residential energy consumption reaching high enough levels to trigger demand response clauses in miners’ power purchase contracts,” Blockware added.
This seasonal phenomenon has resulted in lower hashrate over the past two summers, and lower hashrate means reduced difficulty in mining a bitcoin block. “As we enter the summer months in the US, we look forward to seeing whether the hot weather will force miners to reduce activity and thereby stifle hashrate growth as we saw in 2022. and 2023,” according to a June 17 report by Colin Harper, head of content and research at Luxor Hashrate Index.
In fact, hashrate has begun to decline since reaching a record high in March. As of June 17, hashrate has dropped 10% to 589 EH/s, according to Hashrate Index data. Since the majority of miners are located in the United States, especially in hot Texas, North American companies shutting down their operations will likely reduce hashrate growth. “According to data from the University of Cambridge, approximately 37% of all Bitcoin mining takes place in the United States,” Blockware said. “As the summer continues to heat up, it is reasonable to expect miners in the United States to reduce operations due to high temperatures.”
Lower hashrate and difficulty could be a positive outcome for some miners as competition drops over the summer. Additionally, some miners, like Riot Platforms (RIOT), will be able to earn additional income from the grid by offloading their operations as part of power purchase contracts.
Luxor’s Harper said: “If hashrate continues to decline, then miners could benefit from a negative difficulty adjustment this week – let’s hope for that!”
Thach Sanh
According to CoinDesk
