As the Bitcoin halving approaches, the crypto pioneer’s value is witnessing a significant recovery compared with the last year’s unpredictable events as the Terra Luna crash, detrimental macroeconomic conditions, Binance guilty plea, ongoing military conflicts, etc. The historical data indicates that there exists a rather reliable pattern of rallies, pullbacks, and blow-off tops before and after the halving. But will Bitcoin network difficulty and hash rate keep on growing or maybe the world is about to witness an all-time-low for Bitcoin network difficulty? Let’s figure out.
Current Situation with Global Bitcoin Mining Hash Rate Distribution
Presently, the Bitcoin mining industry is dominated by three countries, namely the US (38%), China (22%) and Kazakhstan (10%). They constitute 75% of the global Bitcoin mining hash rate. Due to the crackdown on all crypto-related activities by the People’s Bank of China (PBOC) in 2021, the global BTC hash rate share decreased tremendously, and China now lags behind the aforementioned leaders. The main reasons that served the ban on BTC mining were increased carbon dioxide emissions, energy consumption and economic instability.
United States
In the US, several states are exploring or implementing legislation to regulate crypto mining activities. These measures may include environmental impact assessments, mandatory use of renewable energy sources, or restrictions on the scale of mining operations. States like New York have already implemented temporary moratoriums on new mining operations to assess their environmental impact.
The US government is increasingly committed to addressing climate change and reducing carbon emissions. Crypto mining’s growing carbon footprint clashes with these environmental goals, prompting governments to consider regulatory measures. The carbon-intensive nature of crypto mining becomes a focal point of concern. The contradiction between these green initiatives and the energy consumption of mining operations may lead to regulatory interventions.
The regulatory grip is also tightening in the United States, where the Department of Energy issued an “emergency data collection request” in February 2024, causing concern among miners. Senator Elizabeth Warren’s call for federal regulators to compel miners to disclose information on emissions and energy usage adds to the urgency. The Biden administration’s focus on reducing carbon emissions in the country heightens the possibility of new mining regulations.
China
In 2021, mining difficulty dropped by 45% due to China’s ban. After the government cracked down on cryptocurrency mining and trading in China, many miners left the country or implemented precautions to avoid detection by the authorities. Many Chinese companies moved their capacities to Kazakhstan, Russia, Ethiopia, Americas, and the chance that the crypto mining industry will reincarnate in China is very scarce.
Kazakhstan
Kazakhstan, currently contributing 18% to global BTC mining hash rate shares, faces a significant warming issue linked partially to its carbon footprint from mining activities. Approximately 70% of the country’s electricity is generated from coal. According to World Bank data, Kazakhstan’s temperature is expected to rise faster than the global average. Already in 2024, an assessment of potential risks to economic and financial stability related to climate change is underway. Kazakhstan has taken a proactive stance, having signed agreements in January 2024 to combat global warming.
In response to environmental concerns, Kazakhstan has taken a bold step by licensing digital mining activities. As of January 1, 2024, at least 50% of digital assets produced by miners in Kazakhstan must be sold through licensed exchanges. Additionally, regulations governing the purchase of electricity by digital miners have been introduced. This move is just the beginning, and further tightening of mining regulations may lead to a reduction in mining companies within Kazakhstan.
Considering the global macroeconomic instability, ongoing armed conflicts, environmental pollution issues coupled with energy production/consumption, 2024 may witness another detrimental situation with the drastic downfall of the global BTC hash rate shares. This convergence of regulatory actions may lead to the most significant decline in mining difficulty in global history. Past performance may be a predictor of future performance.
Hashing24: Your Gateway to Efficient Bitcoin Mining
Hashing24, an official distributor of leased BTC hash power, recognizes the challenges and opportunities inherent in this evolving BTC mining landscape. By providing access to large-scale and high-tech leased BTC hash power produced by Bitfury and Wattum mining data centers, Hashing24 empowers individuals and businesses to navigate the changing tides of the BTC mining industry.
Taking into account the present-day situation with the upcoming BTC halving event, market fluctuations, uncertainties in the economic sector, eco-friendly initiatives, wars and conflicts, a small window of opportunity prior to BTC halving may be the best choice for getting into remote Bitcoin mining. Nobody knows for sure if Bitcoin mining network difficulty will go up or down, but one can definitely say that using the leased BTC hash power is one of the best options available. This being the case, Hashing24 offers affordable and flexible Bitcoin mining contracts (12-, 18- and 24-month plans), which in turn can hedge the risks associated with the crypto mining restrictions and high cost of mining (hardware, energy expenses, maintenance, etc.).
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