The cryptocurrency world is rapidly evolving. There is a growing interest in Bitcoin mining operations regarding the proof-of-work consensus mechanism. In addition, miners are gradually facing difficulties in the process.
In this context, it is worth noting that the number of bitcoins held by cryptocurrency miners has recently reached a 10-year low. Consider the following chart highlighted by cryptocurrency market research platform IntoTheBlock
In addition, the research platform said in a tweet that "cryptocurrencies are evolving and miners have a smaller role in them."
Oddly enough, the amount of BTC held by miners is at a 10-year low. At the time of writing, bitcoin hash rates are near record levels. The entire miner community only has a total of 1.95 million bitcoins – one of the lowest numbers since 2010.
Well, the bitcoin network's hash rate and difficulty approached record levels in February. Bitcoin's 7-day average hash rate was 191 EH/s. By February 17, that rate jumped to 220 EH/s. Thus, marking a 15% increase. The rise in hash rate resulted in an increase in difficulty of about 4.8% in February. Ergo, a blogger for Luxor Technologies' data platform Hashrate Index, notes that
“For about half a month, bitcoin miners performed hash calculations at the highest difficulty in history, so they earned fewer bitcoins per unit of hash rate.”
This pressure on miners' profit margins leads miners to "sell some of their assets to cover operating expenses". Needless to say, higher hash rates and difficulties will inhibit output.
Among the top seven publicly traded miners in North America, bitcoin production has fallen by an average of about 8.6%. This is evident in the bar chart analysis below.
Sorry, no sorry
Different enthusiasts have expressed concerns about the carbon credits incorporated by these companies. This came to light after the latest "executive order" from U.S. President Joe Biden called on his administration to study and report on the environmental costs and potential benefits associated with cryptocurrencies.
Since then, O'Shares ETF Chairman Kevin O'Leary has sold off all of his cryptocurrency mining investments.
The @POTUS Executive Order is a direct blow to public #Bitcoin mining companies. Now there’s an initiative to audit the carbon neutrality of these miners. Carbon credits are non-auditable, so these stocks will end badly. I’m sold on all of them https://t.co/x3uihz0ymu– Kevin O’Leary aka Mr. Wonderful (@kevinolearytv) March 11, 2022
However, with the hash down by 1.5%, March did show some mercy to those affected miners. As of press time, it was at 189M TH/s. This is a potentially positive development for miners.