The rising network difficulty and the need to pay for energy are pushing out smaller players and even publicly traded corporations.
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The Bitcoin () mining difficulty, a metric that tracks the relative challenge of adding new blocks to the ledger, climbed to a new all-time high of 142.3 trillion on Friday.
Mining difficulty hit in August and September, driven by an influx of freshly deployed computing power over the last several weeks.
Bitcoin’s hashrate, the average of the total computing power securing the decentralized monetary protocol, also hit an all-time high of over 1.1 trillion hashes per second on Friday, according to .
The and the constant need for energy-hungry, high-performance computing power to secure the network are making it harder for individual miners and corporations to compete, raising concerns that Bitcoin mining is becoming increasingly centralized.
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Smaller miners and even publicly traded companies are facing , which have access to free energy resources, and energy infrastructure providers that can vertically integrate Bitcoin mining into their business operations.
Several governments are already mining Bitcoin or exploring mining with , including Bhutan, Pakistan, and El Salvador.
In May, Pakistan’s government announced plans to for Bitcoin mining, as part of the country’s regulatory pivot embracing cryptocurrencies and digital assets.
Energy providers in the US state of Texas are also to balance electrical loads in collaboration with the Energy Reliability Council of Texas (ERCOT).
Electrical grids can suffer from a lack of energy to meet consumer needs during peak demand or too much surplus energy during times of low consumer demand, which can damage the electrical grid and pose a danger if not properly redirected.
Energy companies in Texas leverage Bitcoin mining as a controllable load resource to balance these electrical discrepancies, consuming excess energy during times of low demand and turning off their mining rigs during times of peak consumer demand.
This creates profit for these electricity providers without them worrying about the variable cost of energy, creating a significant competitive advantage over publicly traded mining corporations that must pay.
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