The amount of computing power used for Bitcoin mining has risen to a new high as more companies benefited from the Ethereum network''s upgrade, causing investors to moredo the cost of the infrastructure, which is likely to significantly reduce profit margins. Mining difficulties, a measure of Bitcoin miners'' computing power for the blockchain, have increased by 13.6 percent in the two weeks that ended Monday. This is a significant increase in part due to the decline of Ether mining.
Ethereum''s technical upgrade has improved up to one million powerful computers with Ether holders to validate transaction data encrypted by the network and reduce its carbon footprint by 99 percent. After the Merge, Ether miners have to unplug their rigs, leaving additional space in data centers to host Bitcoin mining machines and more electricity to power the rigs.
According to Ethan Vera, the chief operations officer at Luxor Technologies, which has provided services to Ether and Bitcoin companies, the rack space for Bitcoin miners was limited, clearing up the space. Vera claims that roughly 4% of the current computing power for Bitcoin mining has been transferred to Bitcoin miners in the past two weeks.
Bitcoin miners who are already underwhelmed by low Bitcoin prices and rising energy costs will be reduced by a higher level of computing power. Each mining power is limited, thus each mining power provider will pay a limited amount of money after successful processing a certain amount of data.
Before the Merge, Ether mining consumed about half of the energy used for Bitcoin mining. While small miners store graphic cards at home, industrial-scale crypto miners store tens of thousands of cards at their locations.
According to Matthew Kimmell, a digital asset analyst at CoinShares, what''s critical for Bitcoin mining is the availability of cheap electricity. I believe well-capitalized Bitcoin miners might have seen that as a way to expand their assets and deploy machines.
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Bitcoin''s surge is just one reason why Ethereum''s surge is driven by more money from Ether miners.
The major miners have experienced fewer power cuts as they head into the cooler months in the United States and Europe, according to Joe Burnett, a head analyst at Blockware Solutions. While the electricity cost has decreased month over month, it might rise once more as people turn on their heaters in the winter, according to Vera.
Bitcoin miners are able to tap into the Ether miners'' data center and energy infrastructure, but they can''t use graphic cards. Instead, they use computerized computers that are capable of mineing Bitcoin.
Bloomberg L.P.R.C.F. in 2022