|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cryptocurrency News Articles
Nuke 'Em: AI's New Interest in Nuclear Power Might Offer a Solution to BTC Miners' Insatiable Electricity Demands
Oct 18, 2024 at 03:00 pm
BTC block reward miners continue to struggle to turn a profit, but AI’s new interest in nuclear power might offer a solution to miners’ insatiable electricity demands.
Bitcoin (BTC) mining revenue and profits took a hit in September from the previous month, with revenue experiencing its worst month so far this year, according to Jefferies Group analysts.
To make matters worse, and as highlighted by Jefferies, this trend is likely to continue into October with mining difficulty showing little sign of easing.
Currently, the average price to mine a single BTC token is over $80,000, while BTC’s fiat price is around $67,000.
Over October, BTC’s fiat price enjoyed a healthy gain, but the network’s difficulty is rising at twice that rate. It’s no wonder that miners are continuing to ‘pivot’ to more profitable activities, including serving as data centers for AI and other high-performance computing (HPC) tasks.
Others are sidestepping the actual work of competing for block rewards altogether in favor of taking on debt to simply buy BTC. They’re attempting to follow the path laid down by MicroStrategy (NASDAQ: MSTR), which has enjoyed a stock price surge this year on the back of the roughly 245,000 BTC on its balance sheet.
This is all fine and well. Right up until the moment it isn’t. Years ago, The Simpsons previewed the likely fate of BTC HODL’ers who refuse to see the potential downsides of investing in utility-free digital Beanie Babies. Remember, kids: you can’t say you weren’t warned.
Anyway, here’s a glance at how some of the most prominent publicly-traded BTC miners fared in September, in descending order of magnitude:
While the above companies offer snapshots of the electricity costs of running their thousands of mining rigs across multiple facilities, we generally have to wait for their quarterly earnings reports to see the full cost of production. This includes the requirement to amortize and eventually upgrade their technology to keep abreast of rivals, as Bitfarms’ case above amply demonstrates.
To pivot or not to pivot
Between the unforgiving mathematics of BTC mining and fickle investors turning their attention from ‘crypto’ to AI, miners’ press releases are increasingly downplaying mining operations in favor of their AI/HPC opportunities.
Earlier this month, Riot Platforms CEO Jason Les told Bernstein analysts that his company “would be very interested” in a deal like the multi-billion-dollar pact struck this summer between Core Scientific and ‘AI Hyperscaler’ CoreWeave, the Nvidia (NASDAQ: NVDA)-supported cloud platform.
That deal will see Core Scientific provide CoreWeave with additional computing infrastructure, which, building on an existing deal between the two parties, will generate $6.7 billion in revenue for Core Scientific over a 12-year period. Not bad, considering Core Scientific was still mired in bankruptcy proceedings when this year began.
Riot’s Les said his company wasn’t about to announce “a pivot [to AI] just for the sake of it,” but Les wanted investors to know that “Riot has valuable assets and we have received inbounds about those.” However, Riot has historically “focused on [BTC] mining,” and the company intends to “remain focused on that strategy.”
Riot may be content to dance with the one that brought it, but other operators can’t pivot fast enough. Some of these pivots appear to be based on the fact that the stock prices of miners making the most AI/HPC noise are performing better than their BTC-focused rivals.
Regardless of their focus, a rich-get-richer mindset prevails, with every week bringing miner press releases detailing acquisitions of smaller mining operators who can no longer compete with the big boys. Coupled with other miners switching their focus to AI, the ranks of BTC miners will continue to thin, with dangerous implications for the security of BTC’s proof-of-work consensus mechanism.
Have you got gas?
Depending on which surveys you read, America currently accounts for between 35-38% of the global BTC hash rate, more than the combined share of the next two—and possibly three—leading countries (Kazakhstan, Russia, and Canada). However, miners’ insatiable appetite for electricity continues to create friction regardless of the jurisdiction in which they operate.
Debates rage over how much of America’s electrical capacity miners are devouring (federal agencies have said it’s as high as 2.3% of the total pie). But even the kindest estimates represent not-insignificant chunks of power that could be devoted to more productive purposes than financial speculation benefiting a handful of BTC whales.
Between growing public antipathy towards miners and cash-rich AI firms willing to outbid miners for grid capacity, miners are getting increasingly creative and/or desperate. MARA recently began using excess natural gas from America’s shale oil producers to power localized miniature versions of its data centers. Effectively, MARA is generating its own power to fuel its mining operations.
MARA CEO Fred Thiel told Reuters
Disclaimer:info@kdj.com
The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research!
If you believe that the content used on this website infringes your copyright, please contact us immediately (info@kdj.com) and we will delete it promptly.
-
- BlockDAG Emerges as the Top Crypto Coin of 2024
- Oct 18, 2024 at 06:20 pm
- Crypto fans often look for projects that promise the most growth, especially when new trends in the market appear. Recently, Ripple (XRP) has been facing a tough phase as the SEC continues its legal challenge, which could create new problems and uncertainty for those holding it.
-
- The Atlantic Salmon 50p Is Now Deemed the Rarest Coin in Active Circulation, Surpassing the Kew Gardens Coin
- Oct 18, 2024 at 06:20 pm
- The Atlantic Salmon 50p, which rolled out at the end of 2023, commemorates King Charles III's Coronation year. This newcomer has eclipsed the former champion, the Kew Gardens 50p, which has had coin enthusiasts buzzing since its 2009 release.