Bitcoin markets have been holding steady so far with half of the weekend gone, nursing its wounds from the Friday tumble that took most people by surprise with over USD 1,000 shaved off the price in less than 24 hours.
Saturday’s momentum carried on into Sunday morning in Asia, with Bitcoin hitting a high of USD 7,354 and managing to stay above the USD 7,000 key support level again for another full day, with a low of USD 7,093 (CoinDesk). With the recovery underway, altcoin markets have also enjoyed stronger prices, with Ether staying for the whole day so far above USD 150.
One of the most positive pieces of news to emerge over the weekend is that Bitcoin miners are not, as some analysts have been claiming, giving up. According to Bitcoin hash rate metrics from Coin Dance, there is little change in hash rate securing the network that would suggest any of the miner capitulation claims are correct.
In fact, even after the 15% Bitcoin price drop, the amount of computing power contributing to the Bitcoin network had almost matched its previous all-time high at 134 quintillion hashes per second, just a tiny fraction short of the highest recorded on 10 October. On that day, the Bitcoin price was recorded as USD 8,600, almost 19% more than today’s price.
In fact, the linear hash rate graph is unmistakable in pattern, showing a long-term trend upwards, the same as it has been for the past 10 years, regardless of price.
Last week, Willy Woo took the side of a general consensus that miners were unable to continue operating at such low prices, saying that this week saw the final miners shutting off their rigs. But blockchain entrepreneur Alistair Milne says the hard numbers show otherwise and maintains that miners are, as they always have been, unconcerned with the short- and medium-term changes in price.
There is NO miner capitulation
They are accutely aware of the upcoming halving and are apparently unphased by the recent dip pic.twitter.com/krtabGCuVx
— Alistair Milne (@alistairmilne) November 23, 2019
Milne summarized that the May 2020 halving event is their focus and they are “unphased” (sic) by the current dip. The increasing Bitcoin difficulty itself is an indicator many believe continues to demonstrate Bitcoin’s strong underlying fundamentals. Although it had seen a huge 7% drop at the beginning of November, it has been climbing back higher since, further contradicting the theory of miners dropping out of the Bitcoin network.
+2% difficulty adjustment: no miner capitulation.
Historically blue followed by yellow/red indicates a temporary downwards difficulty adjustment, hashrate & price have in the past increased from this point. pic.twitter.com/JAgECasC0P
— PlanB (@100trillionUSD) November 21, 2019
Crypto analyst PlanB agrees, saying that history will always show that Bitcoin price can only go up after such an uptick in difficulty, while the real-time difficulty generator from Crypto This puts the next adjustment at a +5% rate.
Speaking of miners, there seem to be big upheavals in the former Soviet Union, with the largest data center there opening the path for cheaper, industrialized Bitcoin mining. BitRiver, which opened its doors in Bratsk in Siberia last year, has been seeing a growing customer base using its facility to mine Bitcoin.
According to Bloomberg, what used to be the world’s biggest aluminum smelter had been built by the USSR over 50 years ago, with cheap hydroelectric power fueling operations. This, in addition to naturally cold climates in Russian Siberia, ensures that mining hardware can not only run with cheaper power but more efficiently at cooler temperatures, ensuring also that cooling costs are cut down to a bare minimum.
Oleg Deripaska, BitRiver’s largest shareholder is also the billionaire president of Rusal, the world’s second-largest aluminum producer. Allegedly, it was his idea to build the data center in 2014, with Rusal and energy producer En+ cooperating to repurpose the facilities.
The same Bloomberg report says that crypto mining isn’t actually legally recognized by Russia (though neither is it actually illegal). BitRiver, because of this, is only indirectly mining, since it doesn’t mine but provides the rigs and technical services to clients from a diverse range of international locations, including the US, China and Japan.
En+ reportedly provides some 100 megawatts of power to the facility, which is ordinarily enough to keep 100,000 rigs running. The price of electricity? A little over USD 0.038 without value-added tax, which it sells for USD 0.055 per kWh to miners. That’s a lot cheaper, compared to the average power cost of USD 0.12 per kWh in the US.
So if you’re looking for a cheap place and want a part of the world’s largest Bitcoin mine? Maybe a visit to Bratsk is in order.
Image Courtesy: Pixabay