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The Bitcoin Hashrate at a Turning Point โ€“ Is Bitcoinโ€™s Hashrate Serious?

๐Ÿ”ด MINING IN TROUBLE ๐Ÿ“‰

BTC mining is at a major turning point that may determine the future of decentralization on the network. This could affect us, and nobody has hardly noticed.

Pay attention! In this thread you will understand what is happening

๐Ÿงต๐Ÿ‘‡

(1/15)

Lately, there has been a lot of talk about the Bitcoin Hashrate being at an all time high, which is good for network security.

โŒ However, not everything is too good... And in the medium term this could turn into something negative for us.

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Before going with the miners, we must know that the Hashrate increases mainly for two reasons:

1โƒฃ New computer equipment that works better.

2โƒฃ Greater number of miners.

What is happening to the miners?

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To begin with, we must see mining as a business. Where their top priority is not just making Bitcoin work and earning BTC. Their real priority is to be economically profitable in FIAT money

And like any business, if it's not, it should close.

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โš–๏ธ To determine the level of profitability of miners. We need to look at what may be happening to your income and your costs.

For its part, the income will be determined mainly by the competition between the miners and by the price of BTC...

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CURRENT INCOME OF MINERS:

The Puell Multiple, is a OnChain metric that evaluates the income in dollars of the miners and compares them with their average income in the year.

๐Ÿ“ At these BTC prices, miners are having low income in dollars.

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CURRENT COSTS:

The Hashrate has increased the difficulty of mining and now it is increasingly difficult to validate a block. More investment is needed to continue producing.

๐Ÿ“ The average cost of production could be below current income.

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Soโ€ฆ knowing that currently the profitability of the miners may be in the red and that the level of the Hashrate depends on there being more or better equipment in the network. Why do we keep seeing that the Hashrate does not stop rising?

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Hashrate continues to grow because mining pools are investing in new equipment.

But why invest when miners are less profitable?

For two reasons:

๐Ÿ”น Future growth expectations on BTC

๐Ÿ”น Expel competitors from the market

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Right there ๐Ÿ‘† is the problem:

At these prices, only the largest mining pools that can withstand these times of low profitability can invest. This means that they are taking advantage of the circumstances to gain greater DOMINANCE of the market.

(10/15)

Meanwhile, smaller miners are losing ground and many are being forced to shut down their equipment due to lack of profitability.

๐Ÿ‘‰ Variation in one year of the contribution (%) to the Hashrate:

๐Ÿ“ˆ Foundry USA: from 10% to 25%

๐Ÿ“‰ BTC .com: from 9% to 2.4%

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How does this affect us? โš ๏ธ

Now, 3 large Pools are the ones that dominate mining and together they already control more than 50% of the computing power in the entire network.

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Would a 51% attack be possible?

No, because by participating in a pool, you lend your mining power, not control of the team.

Apart from that which makes it impossible, if it could still be done, we would have to consider the cost of it, which would be too high.

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The aim is to show that not everything that is observed is too good and that there is always a background.

We could start to see decreases in Hashrate indicating that some miners are shutting down their equipment due to lack of profitability.

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๐Ÿšจ We must be alert to it in case they want to capitulate their remaining BTC before leaving.

(15/15)

This post is based on this twitter thread.

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