{"id":131955,"date":"2020-12-12T17:07:00","date_gmt":"2020-12-12T14:07:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/from-moms-house-to-warehouse-bitcoin-mining-is-going-industrial\/"},"modified":"2020-12-12T17:07:00","modified_gmt":"2020-12-12T14:07:00","slug":"from-moms-house-to-warehouse-bitcoin-mining-is-going-industrial","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/from-moms-house-to-warehouse-bitcoin-mining-is-going-industrial\/","title":{"rendered":"# From mom\u2019s house to warehouse: Bitcoin mining is going industrial"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3707ab10e2f\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3707ab10e2f\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/from-moms-house-to-warehouse-bitcoin-mining-is-going-industrial\/#Public_companies_joining_in\" >Public companies joining in<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/from-moms-house-to-warehouse-bitcoin-mining-is-going-industrial\/#Access_to_capital\" >Access to capital<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/from-moms-house-to-warehouse-bitcoin-mining-is-going-industrial\/#Governments_are_getting_involved\" >Governments are getting involved<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/from-moms-house-to-warehouse-bitcoin-mining-is-going-industrial\/#More_decentralization\" >More decentralization\u00a0<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># From mom\u2019s house to warehouse: Bitcoin mining is going industrial<br \/>\n<\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjAtMTIvZjVjZDA5MGEtNGVhYy00ZDkzLTgxNTYtYzVlNTA2NmI2ODNkLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-5a136f3a>\nBitcoin mining started out as a small endeavor taken on by a few individuals repurposing home computers to mint virtual coins that were, at the time, almost worthless. Fast forward to 2020, and Bitcoin (BTC) mining has become a formidable industry of its own, constantly growing and evolving alongside Bitcoin itself.<\/p>\n<p>Today, the Bitcoin network\u2019s hash rate is <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.coinwarz.com\/mining\/bitcoin\/hashrate-chart\">sitting<\/a> at around 129 EH\/s, acting in a similar way to the price of Bitcoin, even following the halving in October this year that saw the mining reward cut in half. James Bennett, CEO of ByteTree crypto data provider, told Cointelegraph that the trend is likely to continue: \u201cThe investment into Bitcoin\u2019s network infrastructure is clear. You only need to look at the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/watch-movies-tv-seriess\/\" data-internallinksmanager029f6b8e52c=\"8\" title=\"Watch Movies &amp; TV Series\" target=\"_blank\" rel=\"noopener\">series<\/a> of all-time-highs of network difficulty to see the rate new mining capacity is being added.\u201d So, here\u2019s how the mining industry is changing and maturing.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Public_companies_joining_in\"><\/span>Public companies joining in<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>There has been a trend of high-profile investors, both companies and individuals, investing in Bitcoin and other digital assets. This is also becoming true for Bitcoin mining as public corporations, including Nasdaq-listed Bit Digital and others, venture into the industry and related activities.<\/p>\n<p>As profits from Bitcoin mining rise back to their pre-halving levels, it makes sense why companies and individuals alike would want to invest in Bitcoin mining as an additional income stream, especially given that it proved to be fairly immune to the encumberments created by the coronavirus pandemic and widespread lockdowns. Whit Gibbs, host of the <em>Hashr8<\/em> podcast, told Cointelegraph on the matter:<\/p>\n<blockquote><p>\u201cA number of large companies have been exposed to Bitcoin mining for quite some time. Most notable of these is Fidelity. They have not only established mining operations, they have also been huge proponents of research and education in the industry. Another notable company with active mining interests is Horizon Kinetics.\u201d<\/p><\/blockquote>\n<h2><span class=\"ez-toc-section\" id=\"Access_to_capital\"><\/span>Access to capital<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>With new participants joining the industry, access to capital is imperative, and many digital-asset liquidity companies \u2014 such as Blockfills, Nexo and others \u2014 now cater to Bitcoin miners. This allows miners to expand their operations and have some wiggle room when they don\u2019t want to sell Bitcoin for a low price.<\/p>\n<p>Blockfills, for example, announced in May that it would be providing financial solutions to mining companies that wish to purchase new-generation ASIC mining equipment in North America. Since then, Blockfills has committed roughly $50 million in financial support to these miners. Neil Van Huis, partner and director at Blockfills, told Cointelegraph:<\/p>\n<blockquote><p>\u201cFinancial support is a primary function of any growing asset class. Our objective is to continue bringing traditional practices to our rapidly growing sector which fill voids and advance the space. $50M is really just the beginning. We have another $50\u201370M to get finished in the next few months and expect that we could have as much as $250M done by May of 2021.\u201d<\/p><\/blockquote>\n<p>In addition, miners have been subject to the volatility of Bitcoin. Hedging options were not previously available, and while Bitcoin derivatives now allow miners to hedge their bets, hash rate derivatives improve on these and give users a miner-specific product that they can leverage.<\/p>\n<p>Sam Chwarzynski, chief financial officer of Blockware Solutions and managing partner of Blockware Mining \u2014 a company providing hardware and services within the mining industry \u2014 explained that hash rate derivatives are still a new product, with two variations of it becoming popular. There are basic \u201ccloud mining\u201d contracts as well as \u201cdifficulty hedge\u201d contracts that enable miners to lock in specific network difficulty rates for a certain time period, usually six to nine weeks. Chwarzynski further added:<\/p>\n<blockquote><p>\u201cFor a slight premium, Difficulty Hedges allow miners to hedge their cost of production similar to the way traditional commodity producers\/farmers hedge their production with futures &amp; other derivatives. As the commoditization of Bitcoin mining continues we expect the hashrate derivatives market to mature as well.\u201d<\/p><\/blockquote>\n<h2><span class=\"ez-toc-section\" id=\"Governments_are_getting_involved\"><\/span>Governments are getting involved<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Bitcoin\u2019s reputation has changed tremendously over time, and this has led governments to take either more relaxed or regulated stances toward the cryptocurrency industry. Countries like Portugal and others have cut taxes on activities such as cryptocurrency trading and mining as a means to incentive growth. Gibbs told Cointelegraph that \u201cAside from self-mining, many nations are actively supporting Bitcoin miners through energy subsidies and tax incentives. I think now they know it is imperative to ensure as much hashrate is within their borders as possible.\u201d<\/p>\n<p>Other governments have started to invest in Bitcoin mining themselves, with Kazakhstan having set up 13 Bitcoin mining operations in the country, and is on track to open four more. However, not all governments have a positive stance toward cryptocurrencies, and mining is still illegal in some countries.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Jumping into the pool: How to earn a profit mining Bitcoin and Ether<\/em><\/strong><\/p>\n<p>Mason J<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>a, CEO of Blockware Solutions and managing partner of Blockware Mining, told Cointelegraph that such scenarios create a lot of risk: \u201cMany farms in China, Venezuela, and other countries face situations where the government may not support their operation. That is, farms operate illegally and if caught may have their operation shut down and miners seized.\u201d<\/p>\n<p>On the other hand, other governments have taken a less-than-conventional approach to BTC mining. While Iran legalized the practice last year, it was recently <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.isna.ir\/news\/99080301359\/\" data-amp=\"https:\/\/www-isna-ir.cdn.ampproject.org\/c\/s\/www.isna.ir\/amp\/99080301359\/\">announced<\/a> that newly minted Bitcoin must be sold directly to the country\u2019s central bank. Gibbs added:<\/p>\n<blockquote><p>\u201cThe ability to anonymously accumulate Bitcoin through mining is an attractive value proposition for countries who aren\u2019t able to easily transact with other nations due to sanctions, etc. My assumption is that a few nations are already mining Bitcoin for this very reason.\u201d<\/p><\/blockquote>\n<h2><span class=\"ez-toc-section\" id=\"More_decentralization\"><\/span>More decentralization\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>With all of the new tools, access to new resources, and collaboration and security provided by governments on several levels, it\u2019s likely that mining will continue to be taken over by companies with large sums of capital to invest. However, it will also become more decentralized when it comes to the geographic distribution of mining farms, according to Gibbs.<\/p>\n<p>He added that Chinese miners are now diversifying some of their operations to other countries, but that would not mean that they are losing their dominant position: \u201cAs long as 100% of the Bitcoin mining ASICs originate in, or very close to China, they will continue to have an insurmountable edge on the rest of the world.\u201d<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>How to build a crypto mining rig in 2020 to earn Bitcoin and Ether<\/em><\/strong><\/p>\n<p>As big plates come in with big money, mining is likely to continue to slip out of the reach of the community. What once started out as a few people using their personal computers for mining is now a gigantic industry where specific machines must be purchased along with hosting, maintenance and other expenses. For the time being, however, mining Bitcoin can still be profitable, especially as Bitcoin price continues to reach new levels.<br \/>\n<template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/from-mom-s-house-to-warehouse-bitcoin-mining-is-going-industrial\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# From mom\u2019s house to warehouse: Bitcoin mining is going industrial &#8221; Bitcoin mining started out as a small endeavor taken on by a few individuals repurposing home computers to mint virtual coins that were, at the time, almost worthless. Fast forward to 2020, and Bitcoin (BTC) mining has become a formidable industry of its&#8230;<\/p>\n","protected":false},"author":1,"featured_media":131956,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/s3.cointelegraph.com\/uploads\/2020-12\/f5cd090a-4eac-4d93-8156-c5e5066b683d.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,78828,74989,75012,75462,117,4965],"class_list":["post-131955","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-bitcoin-halving","tag-bitcoin-mining","tag-derivatives","tag-hash-rate","tag-business","tag-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/131955","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=131955"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/131955\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/131956"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=131955"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=131955"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=131955"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}