Hundreds of cryptocurrency coins have been invented, but none have stood the test of time like Bitcoin. Bitcoin is such a significant player in cryptocurrency, that it influences movements of other coins. Once you decide to get into the cryptocurrency space, you’re either one of two types. You are either a cryptocurrency miner or a bitcoin trader. The former are the ones who have been most impacted by the recent bitcoin halving.
The halving was over a month ago, but Canadians are yet to grasp the effects it has on the market. For a long time now, Canada has risen to become the fastest-growing in mining thanks to companies such as D-Central. The most significant effect of the halving is the last network difficulty adjustment, the emergence of a new generation of ASICs.
Bitcoin Records a 15% Rise in Network Difficulty
The Bitcoin market recently recorded a network difficulty high of 15.7 trillion. This is the most considerable difficulty that has been recorded in over two years. Ideally, this value indicates how hard it is to complete for block completion on the block network. It is usually computed every two weeks based on the number of miners who have completed a block. A network difficulty of 15.7 trillion means it takes greater technological power to complete a block.
As a result of the halving, more and more miners choose to sell their expensive machines for cheaper ones. Others are moving to places where electricity is more reasonable. So what does this mean for the industry? How is the hashing rate affected?
Hashing Rates and How Bitcoin Mining Is Affected
The hash rate indicates how fast your computer can complete a bitcoin code or perform a process on the bitcoin network. When the hash rate is high, it is easier for a miner to find a block, complete it, and receive a reward. Mining is essentially a guessing game.
You have to try and guess what code is associated with an individual transaction in the network. If you are the first to get it right, then the block is completed, and you receive bitcoin. Machines with higher hashing rates can perform numerous calculations at once. This increases the odds that your computer will make the right guess.
The hash rate and bitcoin network difficulty depend on each other in numerous ways. When it becomes easy to complete a block, the network difficulty increases, and vice versa. An increase in the network difficulty also affects the number of active bitcoin miners.
Those with greater machines have an advantage, and thus, those with inferior devices suffer a ‘slow death.’ Therefore the number of miners drops for about two weeks.
Once the miners leave the bitcoin network, during the next adjustment, the network difficulty will drop. This then makes it easier for miners to complete a block. However, the difficulty is always adjusted, and so miners will never be out of the network for a long time.
Increase in the Demand for a New Generation of ASICs
Application-specific integrated circuits are devices made for the sole purpose of mining cryptocurrency. These are the machines that are used by miners to generate blocks that keep cryptocurrency moving. They are usually specific to a type of coin i.e.; a bitcoin ASIC can’t be used for Ethereum coins. The business of designing and manufacturing ASICs is as complicated as it gets.
Manufacturers have to come up with new designs frequently to combat the ever-changing cryptocurrency market. With the decrease in the number of miners, manufacturers have taken a hard hit. No one wants to buy ASICs, and those who are buying them want top quality machines. This has necessitated the need for manufacturers to come up with new devices.
According to a recent survey done by PwC, 6 Canadian mining companies are among the top 40 mining companies in the world. The largest company is Barrick Gold, which has a leading role in coming up with new technology. In 2nd place is Potash Corporation of Saskatchewan, with a market cap of about C$ 18 billion. In the long run, it is likely that only these major industry players will survive.
Miners want machines that will place them at an advantage over people using old technology. They want technology that mines faster to make up for the reduction in the number of coins. It is these top manufacturers plus a few small industry players,that can create reliable technology that suits the current market. Despite the market presence of big manufacturers, new and small companies are slowly gaining traction. “And these junior miners are uniquely positioned to take advantage of these price swings, rising by huge multiples, as large scale miners grow incrementally,” wrote The Outsider Club about gold prices.
The same can be said for bitcoin. Companies such as D- central but have established themselves are among the most trusted manufacturers in Canada. D- Central has invested in technology that places miners in a competitive position in the bitcoin market. It primarily caters to the French Canadian community by training new users on mining and providing them with the equipment.
Mining in Canada and COVID-19
Canada has always been the most conducive environment for miners to set up camp. This is especially true for Québec, a French province well familiar to bitcoin miners. This is because of the following factors:
1. Favorable Government Regulations
The best thing about cryptocurrency is that it is an unregulated currency. There’s no bank or government to dictate and regulate how transactions should be done. This untouched form of money is the sole reason why the cryptocurrency is so successful.
Canada’s Covid- 19 Essential services list also includes mining as an essential service. This move has provided miners the opportunity to grow as more people invest in bitcoin.
2. Cheaper Electricity
It’s no secret that mining takes up a lot of electricity. It is the highest utility that miners have to pay for. BBC News recently reported the “seizure of about 1000 bitcoin mining machines after a power spike in Iran.” A University of Cambridge tool has estimated that mining consumes the same amount of energy that Switzerland uses in a year.
In Quebec, the story is different. Warehouses that had been abandoned for years are now money-minting locations. The cost of power is about 4.5 cents/kWh in Quebec. This is half the price of energy in the United States.
3. Cold Climate
Mining machines are always running 24/7, and therefore they generate significant amounts of heat. Without a proper cooling system, you run the risk of overheating your computers.
Paying for cooling systems is very expensive, especially if you mine on a large scale. The Quebec climate reduces the need for coolers as the heat produced escapes into the cold air.
Now more than ever, people are investing in bitcoin mining. Everyone is home, and they now have time to learn about cryptocurrency trading and mining. D-central is the ideal platform for those who are just starting in the industry.
Choosing to mine bitcoin may seem like a daunting task at first, especially because of its complexity. However, with the correct guidance, you can be on your way to being a significant miner in the industry. We are located in Quebec, which is also known as the mining hub of Canada.
Contact us to learn how you can start your journey.
Bitcoin Mining in Canada Is at an All-Time High
It’s time to make money! Find out why Canada is the fastest growing country in bitcoin mining and find out how you can get in on this trend.