Over the recent months, publicly traded Bitcoin mining companies have had the controlling share of the Bitcoin network hash rate.
Who are Bitcoin miners?
Good question. Bitcoin miners are the ones who validate Bitcoin transactions digitally and put the new bitcoins into circulation by adding them to the blockchain ledger. The whole process is quite energy consuming where the miners have to work with customized mining systems to solve mathematical problems in order to confirm new transactions and validate them. Now, many of these Bitcoin miners have recently been getting publicly listed as the accession to more resources and capital will gain them significant profits in terms of mining capacity and revenue. Public mining companies now hold a major stake of the cryptocurrency miner pool, and this has increased sixfold over the last 3 months.
About 20% of Bitcoin’s hash rate is now held by public mining companies and this has risen from just last year’s measly 3%. Interesting to note here that even with the recent surge of Bitcoin miners, the network’s hash rate has remained more or less stationary. Experts say it could be due to supply chain issues with the miner’s capacity to bring in new machines for their operations could be restrained. Now one may ask, what is hash rate? The Bitcoin network’s hash rate refers to the rate at which the number of hash operations/calculations can be performed per second. Hash operations are the computations that are done to mine Bitcoin and higher hash rates imply greater security. It is an important security metric as it keeps the overall system resistant to attack.
Now with the increase of public miners, the self-mining capacity of such resources have largely increased. Their benefaction to the mining community has been significant and companies recently listed as public have claimed a capacity of about 8 EH/s. Which is impressive, thanks to all the extra sources of funding they now receive.
Although there has been a 4% adjustment last week by the network, network difficulty has been skyrocketing due to constraints in the hash rate. Due to the recent difficulty regarding block creation, production rate for the blocks has now decreased and it’s too early to say if the pace can be steadied anytime soon.
