The Bitcoin network hashrate, which is determined as the computing power required for mining, has been soaring recently.
It is observed that the high hashrates are a source of concern for the mining companies considering the increasing energy requirements. The hashrate figures touched a high scale of 316.78 EH/s on Monday, followed by 267 EH/s on Tuesday. The hashrates have been said to have increased by about 60% since the beginning of the year.
The spike has received comments from various experts, including Charles Edwards, founder of a crypto-based firm. He has raised speculations that with the increasingly high rates, highly efficient government agencies and oil companies are entering the sector. He also cited miner capitulation not being a reason behind the increasing trend in the long run; however, in the short-term perspective, it could be considered bearish as the miners sell coins to cover their expenses and continue in business.
Further, he also predicted the continuing scenario might result in stagnation or decline in the rates, which hasn’t happened before. It might also add substantial focus to the assumption that other entities are deploying rigs. This will invite participation from big oil companies, and their influence in the sector can be already witnessed.
Earlier in 2022, a collaboration of ExxonMobil, one of the world’s largest publicly traded international oil and gas companies, and Cursoe Energy System, a company offering oil and gas companies a fast, low-cost, and simple solution to eliminate natural gas flaring, was reported. The companies came together to mine Bitcoin in North Dakota.
In June 2022, the oil subsidiary of Russian natural gas giant Gazprom was reported to provide energy for Bitcoin mining. Increased usage of gas flare energy, a waste product of the oil industry for mining Bitcoin, has been observed.
Following the pattern, Argentina has joined in, with its state-owned energy enterprise YPF announcing its use of flare energy for crypto mining. The examples of these energy companies contributing to Bitcoin mining add validation to the previous speculations that suggested the dominance of oil companies in Bitcoin mining by 2025.
As reported by Todayq, the miners and mining companies are in a tight space considering the increasing competitiveness, energy prices, low-profit rates, etc. The depreciating trend of Bitcoin prices is also making the scene worse. At the time of writing, the price of Bitcoin is recorded at $20,439.60, which is a 0.21% decline from the previous day.