US Emerges as Dominant Player in Bitcoin Mining Industry
According to a recent report by Coin Metrics, the United States has become the focal point of the Bitcoin mining industry since China’s mining ban in 2021. The report highlighted that the strength of US capital markets, as well as publicly-traded mining companies and their disclosures, make them reliable indicators of US hashrate trends.
One such company is Marathon, which saw its operational hashrate grow to 17.7 EH/s in the second quarter of 2023, up from 11.5 EH/s in the previous quarter. This represents almost 5% of the total network hashrate. Marathon also reported having 23 EH/s installed in the US, with a target of 30 EH/s of total anticipated hashrate. Similarly, Riot Blockchain reported an increase in deployed hashrate from 4.8 EH/s in August 2022 to 10.7 EH/s in August 2023.
Mining stocks, which had a difficult year in 2022, have rebounded in 2023 along with the price of Bitcoin. Coin Metrics noted another positive trend for US miners – subsiding inflation pressures, with energy prices falling nationwide year-over-year.
With the next halving less than a year away, US miners are ramping up production and managing their fleets in anticipation of the decline in block rewards. Coin Metrics’ data shows that the average network-wide efficiency has continued to increase, indicating a more efficient overall network. This is attributed to US miners deploying more modern machines.
However, the concentration of hashrate in the hands of a few massive mining pools remains a concern for the Bitcoin community. Foundry and Antpool, for example, control more than 50% of the hashrate. Although Foundry’s dominance has decreased to 29% from its peak of 34% in February, Antpool has gained a 5% share over the same period, reaching 23%.
As more ecosystems integrate with Bitcoin’s proof-of-work, there are concerns that mining pools will try to bypass the mempool and keep the proceeds for themselves.
In conclusion, the US has emerged as a dominant player in the Bitcoin mining industry. With the support of strong capital markets and publicly-traded companies, US miners are increasing their hashrate despite challenging conditions. However, the centralization of hashrate remains a significant concern that needs to be addressed to ensure a more decentralized and secure Bitcoin network.
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