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1

Mining / ViaBTC | Ethereum MEV Is No Longer “Miner” Extractable Value

« on: September 24, 2021, 12:46:45 PM »

Miner extractable value (MEV) was initially proposed by Philip Daian et al. in the paper “Flash Boys 2.0” in April 2019. As the DeFi market grows, the concept has been taken more seriously by people day by day. So why do we say, Ethereum MEV is no longer a “miner extractable value”? To understand that, let’s take a look at the previous concept of MEV.

In essence, the Ethereum chain is known to be a distributed ledger. Each time a user makes a transaction, a fee needs to be paid to the miner who is granted the bookkeeping right to package the transaction data. And when each transaction is initiated, the transaction information flows into the mempool and spreads from node to node, where the miners reorder the transactions according to the price bids, and the transaction with the highest bid is packaged first.

Therefore, there are only two transaction states on the Ethereum chain — confirmed and unconfirmed. However, because of the restricted block space, only a limited number of transactions can be packaged at a time. Thus, miners who have complete autonomy are left with opportunities of arbitrage.

For example, if A decides to buy 400 ETHs, when the transaction information flows into the public mempool, waiting to be confirmed, the miner will know that the ETH price will increase in the short term due to the big trade. Therefore, before confirming the transaction, the miner buys 4 ETHs in advance. When the transaction is completed and the price rises, the miner sells the ETHs to take advantage of price variations. In a similar way, if B is to sell 400 ETHs, the price of Ethereum will surely fall in the short term, and thus the miner will short-sell his ETHs and make a profit from the price decline.

The above two examples are the “preemptive” arbitrage opportunities seized by miners themselves. However, on Ethereum, there’s a different kind of arbitrage opportunity, namely Miner Extractable Value, or MEV, which refers to the profit earned by DeFi traders and arbitrage bots by raising gas fees through Priority Gas Auction (PGA) to prioritize their transactions.

Another Ethereum MEV, and currently the most common method of MEV, is exchange arbitrage. When the price of a cryptocurrency on one exchange deviates from that on another, usually caused by large-scale transactions on one of the exchanges, arbitrage opportunities arise. Capitalizing on the inefficiency of the exchanges, arbitrage bots buy in assets for a low price and sell out for a high price. While making profits, it also brings the prices on the two exchanges back to the same level. In addition, there will be many similar arbitrage opportunities between the DEX (decentralized exchange) on the chain and the centralized exchanges off the chain.

Overall, MEV benefits one side of the Ethereum ecosystem at the expense of many other users. Although MEV is a behind-the-scenes operation, and the reordering of transactions by miners itself is relatively secretive, MEV has become very common in the Ethereum ecosystem.
According to MEV-Explore, Ethereum’s total MEV volume has reached $720 million since January 2020, most of which comes from DEX, with Uniswap (44%) and Sushiswap (21%) alone accounting for a bulk.

Interestingly, the MEV-Explore has changed the full name of MEV from the previous “Miner Extractable Value” to “Maximum Extractable Value”. As mentioned earlier, the current MEVs in the Ethereum ecosystem no longer exclusively belongs to miners but also DeFi traders and arbitrage bots, who obtain MEVs through arbitrage strategies, leaving miners with only the transaction fees. Therefore, miners can only receive a small part (only 12%) of the MEV on the chain, and the definition of “M” in MEV stands no longer for “Miner” but “Maximum”.

2

Mining / ViaBTC｜Fast-growing Crypto Miners See An IPO Boom

« on: September 18, 2021, 04:41:57 AM »

On September 13, tech services company Support.com announced the closing of its merger with Greenidge, a New York-based bitcoin mining and power generation company as of market close on September 14. Shares of Greenidge Class A common stock will begin trading on The Nasdaq Global Select Market on September 15, 2021.



A few days ago on September 9, Canada Computational UnlimitedCCU.ai, operator of a carbon-neutral bitcoin mining center, also went public on the Toronto Stock Exchange (TSX) through a merger with Capricorn Business Acquisition. The company began trading on the TSX Venture Exchange in Toronto on September 12.

Several bitcoin miners have filed for listing over the years. In addition to the above two, UK-listed miner Argo Blockchain has applied to list the ADSs on the Nasdaq Global Market; Iris Energy, which completed rounds of financing this year, has filed with the SEC for a direct listing on the Nasdaq stock exchange for the fourth quarter; well-known North American private miners such as Core Scientific and Stronghold Digital are also looking to go public in the US.

Fast-growing Bitcoin and cryptocurrencies have grabbed much attention from the capital community. Many public companies and investors are purchasing BTC on their own or buying trust products such as GBTC, as cryptocurrencies have become a key investment target for them. At the same time, cryptocurrency mining, essential to the crypto industry, has been favored by many investors. Taking advantage of the thriving market, a large number of bitcoin miners have seen their chance to go public. By far, over 20 of them have succeeded through acquisition, reverse acquisition, or direct listing applications.

North America is the first choice for most players to go public, and it is rising to be a new global bitcoin mining hub. In the wake of China’s recent mining clear-outs, Chinese mining farms, a top hashrate source, dwindled, and many miners have relocated their rigs to Kazakhstan with abundant electricity or to North America (including Texas, Maryland, and Canada) with favorable policies. Together with billions of dollars spent by many North American miners on buying rigs and expanding farms, North America’s hashrate dominance continues to improve.

Riot, Marathon, Bitfarm, Hut8, and Argo, the top five U.S.-listed North American bitcoin miners, have mined more than 10,500 BTCs so far this year, according to The Block. Their listing reports indicate that the five companies have added to their balance sheets a total of 17,960 bitcoins, or nearly 820 million dollars, which are four times the 4,176 bitcoins held as of December 31, 2020. As more miners are listed in the U.S., bitcoin output in North America may continue to grow and take a bigger share globally thanks to a stable policy and political environment and a more mature mining construction system.



The booming crypto mining industry is drawing more and more participants. For example, DCG (Digital Currency Group), which owns the world’s largest cryptocurrency fund Grayscale, broker Genesis, and media CoinDesk and invests in Coinbase and other well-known cryptocurrency companies, founded a mining company Foundry last August. Despite many new players, the established Ant Pool, F2Pool, and ViaBTC remain the top three mining pools by hashrate.



Bitcoin, whose value has kept rising since last year, becomes a good investment to many traditional companies, Internet players, and financial institutions. The strong momentum has pushed many to be listed very soon. In the future, miners will likely see another IPO boom as the industry continues to develop.

3

Crypto Discussion / ViaBTC｜Top 10 PoW Tokens by Non-zero Address

« on: September 15, 2021, 12:40:56 PM »

In the crypto world, the number of non-zero addresses is one of the key metrics for asset analysis. The more non-zero addresses a token has, the more holders there are, which means that more people are investing in the asset. Besides, it also shows a high degree of consensus. Based on data from online sources as of September 1, 2021, ViaBTC listed the top ten PoW tokens ranked by the number of non-zero addresses for your easy reference.



Top 1: ETH
ETH is the PoW currency with the most non-zero addresses and the second most valued token, second only to Bitcoin. Relying on the comprehensive smart contract functions, Ethereum developers can build a wide range of applications on the Ethereum ecosystem. This is appealing to a large number of users. In fact, plenty of users choose to hold ETH because they need DeFi or other Dapps on the platform to pay the Gas fees required for transactions and application interactions. As the ecosystem expands, Ethereum will have more non-zero addresses. Yet as the ETH2.0 upgrade is expected in 2022, Ethereum will shift from PoW to PoS.

Top 2: BTC
As far as cryptocurrencies go, Bitcoin is much more famous than its peers. BTC is the PoW currency with the second most non-zero addresses and also the most valued token. Compared with ETH, due to the lack of smart contracts, Bitcoin can only be used for payment, which is why its non-zero addresses are fewer. However, as the most noted cryptocurrency, Bitcoin remains the first choice for a great number of users.

Top 3: BSV
BSV is a BCH hard fork. In 2018, Bitcoin ABC, the primary development team of BCH, disagreed with the Bitcoin Satoshi Vision team led by Craig S Wight. The latter directly increased the block size to 128 MB and triggered a blocksize war. Finally, BSV was hard-forked from BCH by the Bitcoin SV team. Though BSV has a large number of non-zero addresses, its price is far less than BTC and is also behind BCH.

Top 4: BCH
In 2017, BCH was created due to a heated community disagreement. On the one side of the argument was Bitcoin ABC, the advocate for big blocks who championed the scaling of Bitcoin; and on the other side were proponents of small blocks led by Bitcoin Core. Faced with Bitcoin Core’s reluctance to go with the Hong Kong consensus, Bitcoin ABC developed its own client system that scaled BTC to 8MB, which led to the first major hard fork in the history of Bitcoin and the birth of a new cryptocurrency called BCH that remains one of the top five most valuable PoW tokens to this day.

Top 5: DOGE
Among the existing cryptocurrencies, in terms of the scope of influence, Bitcoin is followed by DOGE, rather than Ethereum. When DOGE was first launched as a tool for community rewards, the token had more active addresses than its PoW peers like Litecoin. Since the beginning of 2021, KOLs such as CEO of Tesla Elon Musk and the Dallas Mavericks owner Mark Cuban have backed DOGE, which has enabled an almost hundredfold growth. Meanwhile, DOGE ownership is becoming increasingly concentrated, with fewer active addresses. The token has gradually evolved from a reward tool to one of the most favored investment targets.

Top 6: LTC
Investors noticed the emerging currency by the name of Bitcoin soon after its launch, while many developers believe that the token can be further improved. Against this background, a large number of “fake” Bitcoin tokens were created, and the most circulated one is Litecoin. At one point, the quote “Bitcoin is gold, and Litecoin is silver” became trending. Litecoin made minor technical finetuning based on Bitcoin. The greatest feature of Litecoin is that it is based on the Scrypt algorithm, which requires more memory for mining.

Top 7: ETC
In 2016, due to the system vulnerability of the Ethereum smart contracts, massive funds of the most trending project DAO were hacked. To fix the breach, the Ethereum Foundation implemented an unconventional “hard fork” by releasing a new version of the Ethereum that did not include the hacked transactions. While most of the hashing power supported the new version, some were still maintaining the original chain, which gave rise to ETC, a token forked from ETH. The birth of ETC is a protest against the Ethereum Foundation’s response to the DAO hack by certain members of the Ethereum community. To date, the ETC community is still operating normally. As ETH shifts to a new consensus mechanism, some miners may switch their ETH hashing power to ETC, because it has the same algorithm.

Top 8: DASH
As one of the three most noted anonymous tokens, DASH uses CoinJoin to perform private transactions. Users can choose whether to activate this anonymous technology that divides the transfer amount into equal parts to keep the sender anonymous. As it was first promoted in developing countries, DASH is now the anonymous token with the most users and the largest turnover.

Top 9: DGB
DGB is a decentralized cryptocurrency and global payment network. Inspired by Bitcoin, DGB enables fast transactions with little or no fees. In addition, DGB can be mined with multiple algorithms, which means miners can use any mining machines as long as they support SHA256, Skein, Qubit, Groestl, or Scrypt.

Top 10: ZEC
ZEC is the first cryptocurrency to adopt the zero-knowledge proof mechanism. Compared with Bitcoin, the most prominent feature of ZEC is anonymity. When trading, users can choose to automatically hide the information and amount of the transaction concerning both parties, which can only be seen by those holding the key. Regarded as the best anonymity solution, ZEC’s zero-knowledge proof technology is also used in the scalability solution of Ethereum.

Though the number of non-zero addresses is crucial for assessing the consensus level of a cryptocurrency, auxiliary metrics such as the proportion of big holdings and the number of daily active addresses should also be considered in assessments of the decentralization and liquidity of a token. When looking for a target token, to maximize the profit, miners can take into consideration these metrics, or adopt the Smart Mining service offered by ViaBTC to concentrate their hashing power on tokens with higher returns.

4

Mining / ViaBTC｜Iran to Lift Mining Ban and Raise Electricity Price

« on: September 10, 2021, 08:19:58 AM »

In May, Iran issued a four-month temporary ban on crypto mining. However, according to the media, the CEO of the Iran Power Generation, Distribution and Transmission Company (locally known as Tavanir) confirmed that the temporary ban will be lifted on September 22, and all authorized miners will be able to resume mining.

Back in July 2019, Iran recognized crypto mining as a legal industrial activity, but miners must first obtain permits from the Ministry of Industry. To date, the Ministry has issued permits to 30 mining entities, which attracted droves of miners from all over the world. However, since January, more than ten provinces and cities in Iran have suffered large-scale blackouts. To cope with the power shortage caused by the peak power consumption in summer, on May 26, Iranian President Hassan Rouhani announced a ban on crypto mining.

The ban of all crypto mining, regardless of whether the miner is licensed, is primarily a result of the surge in the power consumption of mining. Illegal miners consume about 3,000 megawatts of electricity per day, which is ten times that of licensed miners. In some areas, power failures have disrupted the day-to-day lives of locals, and many citizens took to the streets to protest against the issue. To alleviate the power shortage, the government had to issue a four-month ban.

Iran, a country in West Asia, is part of the Middle East. The country has an area of about 1.635 million square kilometers, which is about the size of Alaska. According to the country’s population statistics in 2019, Iran has a total population of around 81.65 million, which is less than the population of some Chinese provinces. As a country in the Middle East, Iran has abundant reserves of oil and natural gas, and its economy is also largely driven by oil exploration. In the past few years, the electricity price in Iran remained low and the power supply had also been stable, which partly explains its attraction for global miners.

In September 2017, then President Donald Trump issued a new travel ban, the targets of which included Iran. For a long time, the country has remained the target of economic sanctions imposed by the United States and other countries, leading to sluggish economic development in recent years. Meanwhile, Iran has also suffered from problems such as inflation and currency devaluation. It has been reported that Iran’s inflation rates in 2018 and 2019 were 34.6% and 36.5%, respectively. As such, alternative legal tenders such as the dollar are very appealing to authorities in Iran. Furthermore, in the face of inflation, the Iranian people also wish to have another store of value. According to the Cambridge Bitcoin Mining Map, before the ban, Iran accounted for 4.64% of the global Bitcoin hash rate. This earned the government hundreds of millions of dollars, which could alleviate the impact of US sanctions.

According to informed sources, even if the ban is lifted, there is no easy way for mining farms to restore their previous profit margins, as Iran has released stringent new regulations. In addition to a sharp price increase of electricity, these regulations also require all authorized miners to make a lump-sum deposit equivalent to 6 months of electricity bills. Moreover, the power department has asked miners to make the deposit before September 7; otherwise, electricity will not be available on September 22. It is estimated that the electricity price of the country after September 22 will reach $0.085 per kilowatt-hour.

Considering that the total capacity of power generation will remain the same as Iran resumes mining, once the relevant electricity policies are officially launched, it is unclear whether the country can provide a stable power supply. Plus the taxes and operating costs, perhaps Iran is no longer the best choice for miners looking for low electricity prices and loose regulations.

5

Crypto Discussion / ViaBTC | The Much-anticipated Ethereum Difficulty Bomb May Be Delayed Again

« on: September 08, 2021, 12:04:50 PM »

On a recent conference call, Ethereum core developer Tim Beiko addressed the development team that in addition to working on consensus protocol upgrade for the upcoming Eth2, he would continue to focus on the performance optimization of the client end for the Eth1 / Eth2 merger. The conference participants have concurred not to activate a “functional fork” in December, which means that the difficulty bomb delayed by EIP-3554 will likely be suspended again, as the Ethereum network expects no new EIP before the merger.

The delay of the difficulty bomb is no surprise. Its activation is closely related to the Eth2 merger. In July, Tim Beiko stated that if the Eth2 merger was not completed in December, the difficulty bomb would be postponed accordingly.

For its function, the difficulty bomb will directly affect Ethereum mining difficulty, which is determined by the difficulty formula written by developers in the early days.

The formula is as follows:
block_diff = parent_diff + parent_diff / 2048 * max(1 — (block_timestamp — parent_timestamp) / 10, -99) + int(2^((block.number / 100000) — 2))

Bitcoin, the forefather of cryptocurrencies, has its mining difficulty adjusted per 2,016 blocks, and each difficulty adjustment will be based on the total block generation time of the latest 2,016 blocks. Under normal circumstances, it takes 14 days to generate 2,016 blocks. Thus, if the total period is less than 14 days, the difficulty will increase accordingly; and if that period is greater than 14 days, the difficulty will decrease accordingly.
As shown above, the first half of the Ethereum difficulty formula resembles that of Bitcoin, which adjusts the mining difficulty based on the previous block generation time and actual mining difficulty of the previous blocks. In other words, the difficulty of the Ethereum network will be adjusted according to the network hashrate to ensure that the block generation speed of Ethereum stabilizes at about 14 seconds.

And in the second half of the formula, we see a difficulty factor that increases every 100,000 blocks. It grows exponentially as the block height accumulates. Therefore, at a certain block height, the proportion of the factor will be significantly increased, causing explosive growth in the overall mining difficulty. That is why the second half of the formula is vividly referred to as the “difficulty bomb”.

The difficulty bomb has been introduced at the outset by Ethereum designers. The roadmap in the Ethereum white paper had included the Ethereum 2.0 upgrade with the network consensus protocol changing from PoW to PoS. In this process, the difficulty bomb would ensure the smooth transformation in the consensus protocol. As the proportion of the difficulty factor increases, the mining difficulty will increase accordingly, which will consume enormous hashing power and make it difficult to mine new blocks. When the required hashrate exceeds the mining revenue, the miners will stop mining one after another, until finally, no one will mine. By then, the PoW chain will be out of use, and the Eth2 merger will be achieved as scheduled, without any adverse effects such as forks.

As designed, the difficulty bomb should have been activated when the block height reaches 200,000. However, due to Eth2’s multiple delays in the roadmap, the Ethereum developers and community are not yet prepared for PoS. Moreover, the difficulty bomb is ideally activated two to three months before the Eth2 merger; if activated too early, it will significantly increase the block generation time, which will seriously impact the healthy development of the Ethereum ecosystem.

Given that, with a certain amount subtracted from the block height in the difficulty formula, the difficulty bomb has been postponed four times in the Byzantium fork, Constantinople fork, Muir Glacier fork, and London upgrade.

It is fair to say that the activation of the difficulty bomb marks the end of the Ethereum PoW chain. Therefore, for Ethereum PoW miners, the launch of the difficulty bomb can be regarded as an effective signal for evacuation. Based on the current situation, the difficulty bomb will be delayed until the first half of 2022. About two to three months after its activation, the mining difficulty will skyrocket. At that time, Ethereum PoW miners can only abandon the original mining method and stake ETH for PoS mining, or continue PoW mining after transferring the hashrate to other cryptos with the same algorithm.

6

Mining / ViaBTC | A Beginner’s Introduction to Mining Together

« on: September 03, 2021, 01:16:49 PM »

There are two definitions of mining together. The first is pool mining, i.e. cooperation with mining companies. As mining difficulty continues to increase, both the mining threshold and mining machine prices are growing higher. When potential miners cannot afford a mining machine, they could choose to mine together with a well-established mining company.

The second type of mining together is known as merged mining, i.e. linking one or more low-yield tokens to a high-yield token for mining through the same hashing power. Common merged mining includes LTC+DOGE, BCH+SYS, etc.



Today, we will focus on merged mining.

Merged mining was first applied to BTC. As early as 2011, NMC incentives were offered for mining BTC. Currently, in addition to NMC, numerous tokens are linked to BTC, covering SYS, EMC, and ELA, to just name the most common ones.

According to data from CoinMarketCap, in terms of market cap, none of these low-yield tokens are included in the top 300. SYS, the highest valued token among them, ranked 315th. Only tokens with poor liquidity and a low turnover rate are willing to link themselves to high-yield tokens, except DOGE, which unexpectedly surged thanks to Elon Musk.

To get linked with mainstream tokens is also quite demanding. To begin with, the two tokens must share the same algorithm. In addition, the community also needs to vote on whether to link with a high-yield token. For example, though DOGE and LTC are both based on the Scrypt algorithm, the former’s hashing power was only 1/15 of the latter. Proposed by LTC’s founder Charles Lee, the merged mining of LTC+ DOGE was eventually passed by the DOGE community after heated debates.

What makes merged mining possible? Simply put, in merged mining, the high-yield token acts as the parent chain, while the low-yield token serves as an auxiliary chain. For instance, in the case of LTC+ DOGE, the former is the parent chain, and the latter is an auxiliary chain. Using the Auxiliary Proof of Work, the auxiliary chain is able to validate its blocks using hashing power from the parent chain without affecting its normal operation.
Right now, almost all leading pools have launched merged mining. For example, ViaBTC now supports the merged mining of BTC, BCH, and LTC with the below ratios:

In addition to boosting the hashing power of less-established tokens, merged mining also makes these tokens more credible. Through merged mining, the tokens quickly become more active and well-known. For low-yield tokens, merged mining makes 51% attacks more expensive, which ensures on-chain security to a certain extent. Of course, to engage in merged mining, community voting is indispensable. Moreover, technical upgrades are also needed once merged mining is approved.



For miners, merged mining brings extra earnings while the hash rate stays the same. To date (September 1), the prices of NMC, ELA, and DOGE are $1.41, $3.17, and $0.27, respectively. Over the long run, small earnings from these tokens could add up to a big extra income for miners.

7

Mining / ViaBTC Introduction｜What Is BTC “Shutdown Price”?

« on: August 30, 2021, 01:39:38 PM »

When the BTC price keeps falling, the key concern for many users and miners is whether the price will plunge below the shutdown price. For users new to the mining industry, the term “shutdown price” may seem confusing at first glimpse. The shutdown price is an intuitive indicator of the profit and loss of a mining machine. Since electricity is consumed as the mining machine works, this power charge constitutes its operation cost. Further, when the mining profit fails to cover the electricity cost, continued mining incurs losses, at which time the miners will have to shut down their operation. The BTC price in such cases is called the shutdown price of mining machines. You can also take it as the cost price of mining.

The shutdown price is calculated based on the specific mining parameters, covering power consumption, hashrate, electricity price, mining difficulty of the network (hashrate), and the proportion of miner fees in the profit structure.

Based on inference, the formula for calculating the shutdown price is:
Daily mining profit = (hashrates*86,400/mining difficulty of the network/2ł˛) * (block rewards + miner fees)
Shutdown price = electricity price * power consumption * 24 / daily mining profit

For Antminer S19, according to official data, the machine has a power consumption of 3,250W and a hashrate of 95 T. The electricity fee is calculated at $0.077 per kilowatt-hour (power charge standard in China). Meanwhile, from statistics on August 26, the latest BTC mining difficulty, the hashrate of the BTC network, and the weekly average miner fee/block reward are 17.62T, 129.74 EH/s, and 1.3%, respectively.
Then, the daily mining profit = (95*24*60*60/17.62/2ł˛)*(6.25+6.25*1.3%) = 0.00068685 BTC
Shutdown price = 0.077*3.25*24/0.00068685 = $8744.27

In the case of the Whatsminer M30S+, the power consumption and hashrates are 3,400W and 100T.
Then, the daily mining profit = (100*86400/17.62/2ł˛)*(6.25+6.25*1.3%) = 0.000723 BTC
Shutdown price = 0.077*3.4*24/0.000723 = $8690.18

According to the above process, we managed to determine shutdown prices of some mainstream mining machines:



The current shutdown price of mainstream mining machines is around $10,000. According to data on August 26, the BTC price has been fluctuating around $47,000, indicating that miners still benefit from considerable profits. At the current price, there is still room for mining with older models. However, outdated models with shutdown prices exceeding $47,000, such as Antminer S7, AvalonMiner A721, and Whatsminer M3, can no longer be used for mining. The profit margin of machines like Antminer T9+ is also very limited, considering their shutdown price has reached $36,754.
In addition to electricity, mining also incurs costs such as operation and maintenance costs (charged by mining farms), service fees (charged by mining pools), and machine costs. Therefore, other than the shutdown price, a wide range of other costs must also be taken into consideration.
Furthermore, power charges vary significantly in different regions. For instance, in the Russian-speaking regions, the electricity fee is about $0.054 per kilowatt-hour; in Northern Europe, the power charge is around $0.1 per kilowatt-hour; and South America charges $0.031 per kilowatt-hour of electricity fee. This is why shutdown prices drastically differ among regions. For example, according to calculations based on the above figures, the shutdown prices of the same Antminer model in the Russian-speaking regions, Northern Europe, and South America are $6,132.34, $11,356.19, and $3,520.42, respectively.

On the whole, as long as miners manage to maintain a level of hashrates and stable block generation, most of them can still make handsome profits. The shutdown price only serves as a reference based on the current market conditions, and the actual shutdown price also fluctuates in line with the mining difficulty and electricity prices.

8

Crypto Products & Services / ViaBTC｜EDCON Is Coming Soon, Drawing A Lot of Attention from the Community

« on: August 27, 2021, 09:41:39 AM »

According to news, the 5th Community Ethereum Development Conference (EDCON) 2021 will be held online from August 27 to August 29. The conference will be broadcast live to users from all over the world. As one of the largest conferences in the Ethereum community and the blockchain field, EDCON enjoys a high reputation in the Ethereum community. It has been held in Paris, Toronto, and Sydney for the past years. However, due to the recent Covid-19 pandemic, the last two EDCON sessions were held online, but still received a lot of attention from the Ethereum community.

This year, EDCON has received a large number of Ethereum and blockchain scholars, developers, researchers, founders, CEOs, and CTOs of popular projects, as well as members of the Ethereum community. For the time being, speakers confirmed at EDCON 2021 include Ethereum’s co-founder Vitalik Buterin, Ethereum Foundation’s executive director Aya Miyaguchi, Ethereum’s core researcher Danny Ryan, Optimism’s CTO Karl Floersch, Gitcoin’s founder Kevin Owocki, etc.

At last year’s EDCON, dozens of professionals representing the forefront development of Ethereum discussed core issues such as ETH 2.0, DeFi, Layer 2 ecosystem, DApp, and cross-chain technology. This year, the Ethereum Foundation will also elaborate on the development, application and future development of Ethereum 2.0, and join the discussion on the technical hits such as Layer 2 and privacy computing.

Today’s Ethereum is largely credited to the community. After six years of development, the Ethereum community has grown into one of the blockchain technology communities with the largest number of developers in the world, and has gradually realized the transition from ETH 1.0 to ETH 2.0 as laid out in the Ethereum roadmap. Since the last EDCON, Ethereum has successfully launched the beacon chain and completed Ethereum London Upgrade, one of the most important hard fork upgrades before ETH 2.0.

In the roadmap of Ethereum 2.0, a total of three important phases are required: the launch of the beacon chain, the merger of the PoW chain and the beacon chain, and sharding. So far, Ethereum has completed the initial goal of the first phase. 210,000 validators have participated in the verification of the Ethereum beacon chain, staking a total of more than 7 million ETH, that is, approximately 7% of the current total supply. All these figures show the high expectation among the Ethereum community and users for Ethereum 2.0.

At present, Ethereum London Upgrade has been successfully completed, and the Ethereum community is embarking on the second phase of merger. After the merger, Ethereum will switch to a Proof of Stake (PoS) consensus mechanism which will slash Ethereum’s transaction fees and speed up transaction confirmation. Besides, the large number of validators on the beacon chain as we can see today can effectively prevent excessive centralization arising from the centralization of accounting rights.

Previously, Pyrmont, the Ethereum 2.0 testnet, has completed the Altair upgrade, the first hard fork of the Ethereum beacon chain. At present, the Altair upgrade is going smoothly, and the Ethereum technical staff will also shift their focus to the merger of ETH1 and ETH2 after the Altair upgrade. And in Ethereum London Upgrade, EIP-3554 postponed the difficulty bomb to December. At the same time, word has it that there is likely to be another postponement, so the merger of Ethereum 2.0 would probably take place next year.

At last year’s EDCON, Ethereum’s core researchers detailed the testnet and the plan and direction of EIP-1559. This year, members of the Ethereum Foundation will also continue to lay out the follow-up roadmap of ETH2 and related technical design. At the same time, founders of Gitcoin, Fuel, Chainlink, Loopring and other projects will also share their opinions on the ecosystem and application development of Ethereum 2.0. If you’re interested in Ethereum, you can follow the dynamics of this conference to get updated on its future development.

9

Mining / ViaBTC｜Which Country Enables the Best Mining Cost-effectiveness?

« on: August 24, 2021, 01:07:21 PM »

Since this June when the Chinese government started to crack down on crypto mining, the global hashrate center has moved elsewhere as the majority of miners have looked for new mining farms. During this process, priority should be given to mining costs, which vary among countries with different electricity costs.

The recent data can provide us with a simple estimate of the electricity costs for mining across the globe. According to ViaBTC, the hashrates of the entire network reached 115342853.44 TH/s on August 14, 2021, and the miners’ revenue on August 13 alone was about 911.07973618 BTC. Take Antminer S19, the most popular mining machine. As official data suggest, Antminer S19 has a rated hashrate of 95TH/s and power consumption of 3250w.





From the above, we can reach conclusions as below:
The average daily income of a single mining machine is approximately: 95 / 115342853.44 * 911.07973618 ≈ 0.000723 BT
Assuming the electricity price in a country is P, the electricity costs for a single mining machine per day is approximately: P * 3.25 * 24 = 78 P
Therefore, the electricity cost required to mine a bitcoin is: 78 P * 1 / 0.000723 ≈ 107884 P.

Then combined with the statistics of commercial electricity consumption on Global Petrol Prices in December 2020, the electricity costs of mining a bitcoin in countries around the world are as shown in the figure below:



The statistics of Global Petrol Prices are the average costs of electricity for commercial use in various countries. According to the market survey of ViaBTC, there is still some gap between the electricity cost for mining and electricity costs for commercial use in various regions. The electricity cost is around $0.054 in the Russian-speaking region, around $0.1 in Northern Europe, around $0.031 in South America, and US$0.077 in China. From the statistics, the approximate electricity costs for mining in the four major areas of cryptocurrency mining are shown in the following figure:



According to the picture, we can see that South America has the lowest electricity price, but since there are fewer mining farms that can provide hosting, the majority of miners there mine cryptos independently. In other areas, due to the scarcity of power resources nowadays, miners also need to allocate a portion of the mining revenue to the mining farms in addition to electricity costs. The current market survey of ViaBTC reveals that part accounts for approximately 10%-30% of the revenue, and the specific figure varies with local conditions.

In addition to electricity costs and operation and maintenance costs of mining farms, mining costs also involve the purchase of mining machines. Though this cost is fixed, China enjoys certain advantages as it is home to most mining machine manufacturers. In other countries, factors such as logistics and tariffs have pushed up the purchase cost. That explains the difference in the price tag of mining machines across countries.

Before relocating mining machines, miners need to comprehensively consider factors such as local policies, cultural customs, the local climate, the qualification of a mining farm and its partners, in addition to costs alone. The United States and Canada, for example, have a relatively stable political environment and fully-fledged mining farms but high costs of operation, maintenance and electricity; contrast them with the Russian-speaking region, where miners need to face political uncertainties but can enjoy much lower electricity costs thanks to the abundant power supply.

On the whole, miners need to learn to find a stable and reliable mining farm, and such a decision should be made on the comprehensive data analysis and on-site inspection. When entrusting a local mining farm to host their mining machines, miners are suggested to start from a small size to see the mining farm’s stability and the local mining procedures and increase investments after operation stabilizes. Large miners who need to independently or jointly build a mining farm in areas such as South America should be more careful about the political risks and local culture and customs before investment and construction to avoid losses.

10

Crypto Products & Services / A Practitioner in the Blockchain World: ViaBTC Lay out the Entire Ecosystem

« on: August 18, 2021, 12:52:47 PM »

The blockchain industry has never been short of topical issues. Within a few short years, hundreds of blockchain companies and projects have experienced their highs and lows in several rounds of bull and bear markets. Some projects rose to fame overnight and then disappeared in the blink of an eye. Countless entrepreneurs and companies keep throwing themselves into the endless stream of popular concepts, just like moths flying into the fire. Only very few can survive. Perseverance has, therefore, become the hardest thing in the most sought-after industry where the cycle of ups and downs continues forever.

Five years is not a long time in the history of mankind. However, in the blockchain industry that is considered only suitable for “making a fast buck”, it is truly remarkable for operating consistently for five years. Since the official launch of ViaBTC Pool in 2016, ViaBTC has traversed a long way, one step at a time. It now operates five major businesses in the blockchain industry — the mining pool, exchange, wallet, public chain, and capital. To date, ViaBTC has become one of the blockchain companies with the most extensive business presence.

ViaBTC: Starting from the mining pool to provide miners with the highest-quality service
Immediately after its official launch in May 2016, ViaBTC Pool impressed the entire industry with its solid technical foundation and tremendous operation stability. Relying on the self-developed Bitcoin client, the fledgling mining pool technically optimized the broadcasting and transmission solutions of the Bitcoin network. It allowed miners to find and broadcast new Bitcoin blocks more quickly and efficiently, thereby reducing the orphan block rate and guaranteeing stable income of miners.

Moreover, ViaBTC Pool has always proceeded from the perspective of miners. It produces data into visual charts and releases them to miners openly and transparently, with an aim to safeguard their interests. With the clock wound back to 2016, ViaBTC Pool managed to stand out from the cut-throat competition in the mining pool field and attracted many miners, owing to its robust technical strength and high-quality user experience. In less than five months since its launch, ViaBTC Pool jumped to fifth in the world by Bitcoin hashrate and it has long maintained its hashrate stability.
However, ViaBTC Pool has a grander ambition. In the following years of development, the mining pool pioneered the PPS+ income distribution model, the first one to provide diversified income settlement methods and maximize benefits for miners. In response to miners’ demands, ViaBTC Pool has creatively introduced traditional financial instruments to offer two innovative financial services, [Hedging] and [Staking], so that miners can make effective use of financial instruments for greater returns on their mining income.

With stable technical support and continuous product innovation, ViaBTC Pool has served more than 1 million users from over 130 countries and regions. It has long stayed in the second spot in the world by BTC, BCH, and LTC hashrates, as one of the top cryptocurrency mining pools of the globe.

CoinEx: a crypto exchange with a global perspective
In 2017 when ViaBTC Pool got technically stabilized, ViaBTC team started to run CoinEx business. A strong technical background in the field of traditional financial brokerage services made the founding team more comfortable with trading products. In May, CoinEx developed the world’s first 10,000 TPS matching engine. In August, it became the world’s first exchange to support BCH transactions. In July 2018, CoinEx topped the list of global exchanges by the trading volume.

The inherent peer-to-peer nature enables the cryptocurrency to become a universal product quickly. For any company to attain long-term development in the blockchain industry, the global operation is an indispensable step. CoinEx has always regarded the global operation as the most important strategy during its several years of development. Relying on the self-developed core transaction matching system and the extremely fast, smooth user experience, CoinEx has put users’ asset security in the first place and quickly gained the favor of numerous users around the world. At present, it posts a daily trading volume of over $1 billion and has more than 2 million users from 100-plus countries/regions across the globe. CoinEx is committed to providing safe, professional and reliable trading services for crypto traders worldwide.

ViaWallet: A multi-crypto wallet to secure users’ assets

As an increasing number of crypto users hold an unprecedented amount of digital assets, the security of such assets has become an issue that many users cannot afford to neglect. Furthermore, wallet products available on the market are of mixed quality. Some centralized wallets even deceive users under the guise of decentralization. To better serve mining pools, exchanges, and more crypto holders, in 2019, ViaBTC Group launched ViaWallet, which supports more than 30 main-chain assets and includes over one million tokens. The wallet also provides users with multiple derivative functions such as on-chain staking, transaction acceleration, and DApp market, enabling safer and more convenient wallet services.

CSC: A public chain dedicated to building the high-efficiency underlying blockchain infrastructure
After providing users with three high-quality services — the mining pool, exchange, and wallet, ViaBTC has successfully extended its business to the entire industrial chain, including the generation, trading, and circulation of digital assets. However, the stagnant development of public chains has caused many sideliners to take a negative attitude towards it. The public chain ecosystem serves as the lowest-level infrastructure in the blockchain industry, and its performance directly determines how far the industry will go. ViaBTC, a blockchain company gathering a team of the world’s best technicians in the field, now casts its eyes on public chains, the most critical link in the blockchain technology world.

In November 2019, CoinEx launched the CoinEx Chain mainnet, the world’s first high-performance dedicated public chain, which can process 4,000–10,000 transactions per second. It can generate blocks in seconds and confirm transactions instantly. After the DeFi boom in 2020, the performance of Ethereum has obviously restricted the development of DeFi applications. Therefore, CoinEx upgraded CoinEx Chain to CoinEx Smart Chain (CSC) in May this year.

Having introduced smart contracts and achieved compatibility with EVM (Ethereum Virtual Machine), CSC also adopted the PoS consensus mechanism. It can not only help developers easily migrate applications from Ethereum to CSC, but also ensure the speed of efficient transfers. At the same time, the 101 validators further facilitate decentralization, making for a more convenient environment for developers and a better DeFi application ecosystem for users.

ViaBTC Capital: The arrival of capital aims to finance the development of the blockchain industry

After five years of development in its four core businesses of the mining pool, exchange, wallet, and public chain, ViaBTC has built a complete ecosystem covering cryptocurrency issuance, circulation, application, value discovery and the underlying technology of the blockchain. With the most extensive product layout in the world, ViaBTC has grown into a leader in the blockchain industry. Adhering to the vision of “making the world a better place through the blockchain”, ViaBTC aspires to contribute its share to the industry development while developing itself.

Resting on its industry resources and technical advantages, ViaBTC established ViaBTC Capital in August as a dedicated move to invest in Web 3.0, Layer 2, and DApp projects that combine DeFi, NFT or DAO. It aims to support excellent project developers and innovative teams with industry resources and channels for common growth.

Besides, bearing its responsibility for users in mind, ViaBTC Capital utilizes its industry resources accumulated for years to provide developers with post-investment services covering basic technology guidance and international marketing, so that developers can be wholly devoted to blockchain technology, application and the ecosystem construction of the whole industry.

The blockchain industry has been in its infancy over the past few years. Lured by the money-making legends around it, many impetuous entrepreneurs have flooded into the industry, most of whom end up leaving in anguish. By contrast, ViaBTC has always stayed true to its founding aspiration and aimed to become an infrastructure of the blockchain world. Down-to-earth, it is dedicated to introducing blockchain technology and cryptocurrency to more fields and seeks to grow with the entire industry ecosystem together.

11

Crypto Discussion / ViaBTC｜How is Litecoin Different from Bitcoin in Mining Principle?

« on: August 17, 2021, 01:57:26 PM »

While Bitcoin and Ethereum stand for blockchain 1.0 and blockchain 2.0 respectively, Litecoin is undoubtedly the second most popular cryptocurrency of blockchain 1.0. This achievement owes much to its simplicity and obvious advantages in utility. More than 2,000 shops around the world support payment via Litecoin, making it one of the most widely accepted cryptocurrencies. Like Bitcoin, Litecoin can be obtained from trading platforms or mining.

Litecoin, which shares many features with Bitcoin, was created by Charlie Lee, a former programmer in Google. To make Litecoin a “simplified version of Bitcoin”, he first released Litecoin through the open-source client on GitHub on October 7, 2011, and then officially launched the Litecoin network on October 13. Its technical principle is the same as that of Bitcoin, applying a decentralized architecture free from any control of the central authority. New currency issuance and payment transfer are all based on open-source encryption algorithms. But Litecoin improves some of the shortcomings of Bitcoin, such as slow transaction confirmation, a limited quantity, and large mining pools caused by the proof-of-work mechanism.

Compared with Bitcoin, which needs 10 minutes to generate a block, Litecoin only needs 2.5 minutes. Therefore, with faster transaction confirmation and extremely low transaction fees, Litecoin has become a good payment choice for places with small transactions. And the Litecoin network is expected to produce 84 million Litecoins, four times the amount of coins issued by the Bitcoin network. The biggest difference between the two is that the Litecoin workload proof mechanism applies the scrypt encryption algorithm, while Bitcoin uses the sha256 algorithm. The scrypt algorithm takes longer to calculate and requires more memory. This algorithm prevents 51% attacks by making it hard for hashrates to concentrate and dispersing miners. Because the scrypt algorithm of Litecoin is different from that of Bitcoin, Bitcoin mining machines cannot be used to mine Litecoin, which protects Litecoin from attack for normal development. By the way, the scrypt encryption algorithm is also applied to DogeCoin.

As of August 2021, 68.24 million LTC have been mined out of the total number of 84 million. The Litecoin Foundation recently estimated that it will take more than 100 years for LTC to be fully diluted (around 2140). Because as part of the scheme to reduce the block reward by half, the number of LTC mined in each block will be cut every four years — currently, miners can get 12.5 LTC for every block generated.
The total market value of Litecoin is now as high as $9.1 billion (ranked 15th on CoinMaeketCap). The whole network hashrate is 263TH/s (as of August 4). But Litecoin mining is not supported by many mining pools, which does have a lot to do with Litecoin’s scrypt algorithm.

Tailored mining machines are required for mining Litecoin, such as AntMiner (L5, L3+, etc.) and Innosilicon mining machines (A6+, etc.), the profit rankings of which are shown in the table below.

Take ViaBTC Pool as an example. Currently, the Litecoin mining pool has three settlement methods: PPS+, PPLNS, and SOLO. It also launched the joint mining function, only applicable to PPS+ & PPLNS, enabling the allocation of DogeCoin based on the proportion of hashrate contribution.

To test confidential Mimblewimble-based transactions, Litecoin deployed the MimbleWimble (MW) testnet as early as the end of 2020, which will be launched on the mainnet sometime this year. Once this feature is fully activated on the mainnet, Litecoin users will enjoy better fungibility and financial privacy.

12

Mining / ViaBTC Introduction | Trade Secret: How Does a Mining Pool Work

« on: August 12, 2021, 02:22:40 PM »

The mining pool combines the computational resources over a network to strengthen the probability of finding a block or otherwise successfully mining for cryptocurrency, breaking through the geographical restrictions, and providing sustainable income for the miners around the globe. It is fair to say that in the rapid development of the cryptocurrency business represented by Bitcoin, the mining pool takes a large part of the credit.
However, in the early years of Bitcoin, all the miners conducted digital mining alone. Under the SOLO mode, as long as the blocks were generated, they would receive all the benefits, and no such thing as “mining pools” was needed.

However, the Bitcoin network will automatically adjust the mining difficulty per two weeks to ensure that only 2,016 blocks will appear over 14 days, with an average of one block every ten minutes. As Bitcoin mining became more and more popular, many more users have joined the lucrative business, and the total processing power in the whole network skyrocketed, making it less and less likely for independent miners to find blocks. Till now, the odds of generating a block by oneself are like that of winning the lottery. Responding to that, some proposed to combine the hashrates of all miners so that the probability of mining the block is greatly improved, whereas the mining reward is distributed according to the share of each miner. Thus, a prototype of the mining pool took shape.

So, how does the mining pool work? A mining pool contains hundreds or thousands of miners via specialized protocols, who connect their mining rigs to the designated domain names and ports through software. Then, different mining rigs work synchronously, and their solutions collide with those of the Bitcoin network. When a miner finds a block, the block reward is added to the private wallet address of the pool, which will later distribute the reward to the miners according to “shares”: Each time, the miners will be assigned tasks of varying difficulty, and when the task is completed, a share is submitted to the pool. After the mining pool verifies that the share is valid, they will accept the share and count it into the total amount. And according to the number of shares submitted by miners, the income is proportionally distributed. However, a miner’s reward also depends on the payment method adopted by the pool, usually according to five miner reward systems — PPS, PPLNS, PPS+, FPPS, and SOLO. The currencies and settlement methods supported by each mining pool may be different. Therefore, when choosing from the mining pools, users can refer to the official websites for detailed instruction.

However, most mining pools charge withdrawal fees, so that only when the miners’ accumulative rewards exceed the minimum withdrawal amount, can they withdraw profits from the account. Taking ViaBTC as an example, at present, its mining pool supports four withdrawal methods, including Auto Withdraw, Normal Transfer, Inter-user Transfer, and Transfer to CoinEx. When auto withdrawal is enabled, the system will automatically send the mining yield to the user’s current withdrawal address once a day, if the account balance reached the minimum payout manually set by the user. And if the account balance is below the minimum payout, the mining yield will temporally remain in the user’s asset. It’s also the top-recommended withdrawal method. As for the normal transfer, users can withdraw from the account at any time but needs to pay a certain amount of miner fees, whereas zero fees are required for withdrawals made using Inter-user Transfer and Transfer to ViaBTC. The latter two are also recommended.
Although Bitcoin originated from the western world, many insightful Chinese investors have seized the opportunity brought by the rapid development of digital mining, making the scale of the domestic mining pools far surpass that of foreign countries. Currently, on the Bitcoin mining pool rankings, the top pools are all from China.

In general, the mining pool solves the problem that with the increase of mining difficulty, the individual miners’ hashrates are insufficient to stabilize the block generation, and also reduces the difficulty for users to obtain cryptocurrencies such as Bitcoin, which truly makes Bitcoin mining accessible to everyone.

13

Mining / All Things You Need to Know about the Transaction Fee of a Mining Pool

« on: August 09, 2021, 11:49:37 AM »

Before we go any further, let’s start with a simple question. What is a mining pool? The concept of a mining pool was first derived from Bitcoin. It is fair to say that without Bitcoin, there would be no such thing as a mining pool. In Bitcoin’s early years, hashrates were too low across the network, and anyone could mine Bitcoin using a home computer.

Later on, however, the enthusiasm for Bitcoin mining continued to rise, and more and more people joined the mining rush. The hashrate of the whole network mounted, as did the mining difficulty. At that point, it was unlikely to obtain stable income through home computer mining. Therefore, some institutions and platforms noticed the niche and began to consider gathering the hashrates of individual miners. Such a system that brings together miners and their hashrates is called a mining pool.

No matter the miners’ hashrates are high or low, as long as they are connected to the mining pool, they can reap benefits when the platform generates blocks. Of course, since the settlement method and transaction fee rate of each mining pool are different, as are the profits received by miners.

At present, the methods of payments for a mining pool mainly include PPS, PPLNS, PPS+, FPPS and SOLO, introduced as below:

Pay Per Share (PPS): The pay-per-share approach will liquidate the mining revenue based on the submitted hashrate, mining difficulty and block reward. After deducting the transaction fee of the mining pool, the settlement shall be made with the miners for their contribution to the block generation probability. This model allows for the least possible variance in payment for miners while also transferring much of the risk to the pool’s operator. Even if the pool does not mine any block for the whole day, the miners still make a constant profit.

Pay Per Last N Shares (PPLNS): The pay-per-last-N-shares method will calculate the miners’ reward based on their contribution to block generation in the past period of time. After deducting the transaction fee of the mining pool, the settlement shall be made with the miners. Under this approach, the miner’s profit is completely related to the actual profit of the pool, and if no block is generated, there will be no profit nor reward for the miners. In contrast to the PPS model, the actual revenue earned by miners under PPLNS is less stable.

Pay Per Share+ (PPS+): The pay-per-share+ approach is a combination of PPS and PPLNS. Under this approach, the block reward is settled according to the PPS model. However, the transaction fees obtained by the mining pool will be distributed to the miners according to their hashrate share.

Full Pay Per Share (FPPS): Like the PPS+ model, the full-pay-per-share approach also returns the transaction fees to the miners as an additional part of mining income. However, under PPS+ approach, the transaction fees are distributed according to the actual sum obtained by the mining pool, whereas the FPPS approach allocates the transaction fees according to the average transaction fee rate of the day. Due to different distribution rules, the two methods will lead to deviations in mining revenue.

SOLO: Under this approach, the miners conduct mining independently and receive the full rewards for the blocks generated, whereas the mining pool charges a certain fee for the operation and maintenance procedure. This method is more suitable for miners with a high hashrate share. If users have a relatively small hashrate share, going solo is not recommended.

Of course, mining revenue will also be related to the total hashrates, the overall operation capability, and the maintenance capabilities of the mining pool. When choosing a mining pool, users would better choose a leading brand that possesses high hashrates.

Then, according to the selected cryptocurrency, the subscribed hashrate share, and the transaction fee of the mining pool, the user’s daily income can be easily calculated. Taking ViaBTC Pool as an example, as of July 26, the BTC price is $39,930, the mining difficulty is 13.67T, and the transaction fee rate under the PPS model is 4%, so the daily income of 1TH/s is approximately $0.357.

The data above are from the official website of ViaBTC Pool. In case of any conflict, please refer to the latest update on ViaBTC.

14

Mining / ViaBTC | Crypto Mining Taking a Greener Way, Musk Backs Bitcoin Again

« on: August 05, 2021, 11:59:40 AM »

Tesla CEO Elon Musk recently reversed his stance on Bitcoin at the previous “The ₿ Word” event, saying that the all-electric carmaker may once again accept Bitcoin transactions as a payment method once the mining rate for the cryptocurrency reaches 50% renewables. “I wanted a little bit more due diligence to confirm that the percentage of renewable energy usage is most likely at or above 50% and that there is a trend towards increasing that number, and if so Tesla would resume accepting Bitcoin.” Just two months ago, Musk said on Twitter that Tesla would stop accepting Bitcoin for car purchases, citing environmental concerns.

Tesla’s change of heart surprises the market but also proves crypto mining’s green shift. According to the data report released by Bitcoin Mining Council (BMC) on July 1, its first voluntary survey has successfully collected information on renewable energy usage from 32 percent of the total hashrates of the Bitcoin network. The survey results show that 67% of the electricity resources currently used by BMC members and survey participants are renewable energy, and the renewable energy utilization rate of global digital mining can increase to about 56% by the second quarter of 2021.

Before this, due to the growing problem of global warming, there have been more and more discussions on carbon neutrality strategy around the world. One of the focuses is leveled at Bitcoin mining which has consumed huge electricity resources. Since its birth, the total carbon dioxide emissions generated by digital mining have reached 67.23 Mt, with a total power consumption of 141.54 TWh. Each year, electricity consumption in digital mining exceeds the annual power usage of Ukraine. Many Bitcoin mining companies have been suspended in China for carbon neutrality considerations.

At first, the idea that Bitcoin consumes too much energy did not capture popular opinion as many believed that that according to the value of Bitcoin itself, the energy consumption was within the acceptable range. However, Musk’s previous accusations of Bitcoin’s energy consumption issues and the impact of China’s “carbon neutrality” policy have triggered a new round of attention to renewable energy mining in the crypto industry. For some small and medium-sized miners, the shift from non-renewable to renewable energy mining means new costs, and the current volatility in the Bitcoin market further impeded changes in the existing mining methods, which are part of the reason why the advance of renewable energy mining has been slow so far.

However, with the rapid development of the encryption industry, the robust growth of the market volume, and the in-depth deployment of the “carbon neutrality” strategy, if the companies contest renewable energy mining, they will easily attract the attention of the local government as they develop, and will face rigid orders to comply with the carbon emission regulations. This is why some large-sized digital mining companies have turned to renewable energy for the sake of sustainable development and to avoid violations of environmental protection policies such as “carbon neutrality” in the future.

Last year, for example, the electronic payment company Square pledged $10 million to its newly-launched Bitcoin Clean Energy Initiative, which will support other mining companies in the ecosystem to adopt renewable energy in Bitcoin mining. And in March 2021, the well-known crypto mining company Blockchain announced the launch of Terra Pool, a mining pool powered by renewable energy, whereas Neptune Digital Assets and Link Global jointly signed a letter of intent on a solar, wind, and gas-powered mining facility in Canada. Many other crypto mining companies in North America are also working on new standards for energy mix reporting to take active actions.

The adoption of renewable energy in Bitcoin mining may cause a temporal increase in costs but will better ensure sustainable development as it integrates development and environment protection. Now that the transformation to renewable energy mining has begun, the proportion of non-renewable energy mining in the ecosystem will gradually dwindle, and non-renewable energy mining will eventually step down from the stage of history. At that time, it will be difficult for Elon Musk to criticize Bitcoin again on the excuse of energy conservation.

15

Useful Cryptocurrency Resources / ViaBTC Insight: Mining Cost May Rise as the U.S. Becomes New Bitcoin Mining Hub

« on: August 02, 2021, 11:07:04 AM »

The last month witnessed a series of Chinese risk warnings on Bitcoin mining for the goals of “carbon neutrality” and “peak carbon”. That triggers a “mining farm kick out”, with large mining farms emptied, massive mainframe shut down, and miners forced abroad. The rapid plunge in the hashrate is shattering China’s position as the global cryptocurrency mining center.

Some countries have also followed suit by issuing crackdown policies like China. One big factor is the energy consumed by Bitcoin mining and a series of potential disasters that may hit as Earth continues to warm up. Worldwide, 139.86 Twh of energy is used by the new industry, almost the same as an entire country such as Ukraine, according to Bitcoin Energy Consumption. At the same time, carbon emissions reach 66.43 Mt, equal to what Israel produced annually. Yet the crypto market is not at its prime time.
By contrast, North America and Central Asia are more friendly to crypto miners. This does not mean governments there are not environmentally conscious. It is just that revitalizing their economies is more important than environmental protection to them, which has to do with the regional economic development stage and their decision-making priorities.
Mining rigs are mainly moving to North America and Central Asia, with Canada, the U.S., Kazakhstan, and Russia being the top four destinations. They are chosen for a mix of factors: how friendly are the local policies for Bitcoin mining, whether the local power load meets the mining demand, whether the mining resources are of high quality (including the rig host rates and hosting service quality), whether the climate is suitable for mining, and most importantly, how low is the electricity rate. After all, the power bill will take up much of the total mining cost in the long run.
Of the four places above, the U.S. is most likely to be the new pivot worldwide.
In the wake of China’s mining clear-outs, the world’s top 10 mining pools like F2Pool, Antpool, BTC.com, and Poolin saw a big mining power drop. ViaBTC Pool with the mature global operation was an exception, and it even occupied the global mining throne once.
At the same time, a US-based mining pool called Foundry USA is rocketing to the top 10 from outside the top 40. A review of its six-month hashrate growth shows a hashrate increase of over 700% since January 2021. Similar growth is also registered by other local pools in America.
The latest data from the Cambridge Bitcoin Electricity Consumption Index (CBECI) indicates that China’s hashrate dominance is 46% in the second quarter, down from January. By comparison, the U.S. captures 16.8%, a net increase of nearly 60% from January. This is still before China’s ban on crypto mining. The Q3 hashrate data was not released, yet China being replaced by the U.S. is predictable. The migration of Bitcoin mining across the Pacific Ocean is already a reality.

Bitcoin is recognized by more and crypto gains popularity, while energy consumption and global warming bring potential threats. The contradiction causes geeks and environmentalists in the industry to target clean energy. Musk also spoke out about Tesla allowing transactions in Bitcoin again once a certain percentage of mining moves to renewable energy.
The clean energy application and innovation are the future, so are the unavoidable energy consumption of Bitcoin mining and the change in energy structure. However, as countries differ in environmental protection and energy control laws and regulations, Bitcoin miners must face the fact that different administrative jurisdictions, local labor costs, electricity rates, and tax policies are very likely to bring additional costs. In short, all potential factors listed above may make mining more expensive.
That said, as long as the Bitcoin prices remain stable and the industry keeps moving ahead with clear policies in the long run, most miners will not mind spending more.