China’s Inner Mongolia Bans Crypto Mining while Bitcoin Miners Rake in Record-Breaking Revenue

China’s Inner Mongolia Bans Crypto Mining while Bitcoin Miners Rake in Record-Breaking Revenue

The cryptocurrency miners have broken the December 2017 revenue record of $1.25 billion by generating a whopping $1.36 billion in revenue in February.

Up 21% from January revenue, the latest numbers are in part due to the price of Bitcoin hitting a new peak at just above $58,300. The price ATH of the last bull cycle was hit in Dec. 2020.

Miner revenue based on terahash per second (Th/s) also kept up between $0.23 and $0.38 in the month. Besides profiting from selling their BTC at high prices, transaction fees were another driver of these high revenues. Miners raked in $186 million, 13.7% of total revenue from network fees. Up 10.3% from January, fee revenue also hit its highest level since Jan. 2018.

Amidst the growing revenue of miners, China’s Inner Mongolia has banned crypto mining, reported Bloomberg. The region accounts for 8% of the global Bitcoin mining hash rate.

The autonomous region is planning to shut down all crypto-related projects by April and further ban new digital coin projects, according to a draft plan posted on the Inner Mongolia Development and Reform Commission’s website on Feb. 25.

Inner Mongolia, which is known for its cheap energy supplies, aims to cut down emissions per unit of gross domestic product (GDP) by 3% this year and constrain the growth in energy consumption to 1.9% this year.

The proposal to curb cryptocurrency mining in the region was first introduced back in 2018, and the next year, authorities clamped down on the “illegal” Bitcoin mining business.

“It isn’t a real bull market unless China is ‘banning’ Bitcoin Bullish FUD,” commented Alistair Milne, CIO at Altana Digital Currency Fund.

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Author: AnTy

Hive Blockchain Purchases 6,400 Bitcoin Miners From Canaan; Aims to Hit 2021 Goal

Hive Blockchain Purchases 6,400 Bitcoin Miners From Canaan; Aims to Hit 2021 Goal

Hive Blockchain, the Vancouver listed crypto mining firm, has announced the purchase of 6,400 Avalon Miner 1246 machines from Canaan Creative. This new purchase is part of its 2021 goal to scale its mining capacity beyond 1,000 Petahash per second (PH/s).

The new mining machines will increase Hive Blockchain’s mining power by an aggregate of 576 PH/s, bringing the total to 1,229 PH/s once the machines are delivered and deployed. Hive said that newly acquired miners would be delivered in 8 tranches within the course of 2021.

“Based on the orders that have been placed, this new equipment is expected to be delivered in 8 tranches in 2021, with 500 miners delivered in May and June and 900 miners delivered each month in the remainder of calendar 2021 commencing with the July delivery.”

Hive anticipates that the 1,000 PH/s targets will be achieved sooner than expected with the order already in place. The firm is now eyeing a new goal of 2,000 PH/s by the end of the year, a milestone that could further spur its overall market value.

Meanwhile, Canaan Creative, which reported a Q3 net loss of $12.3 million, might find some reprieve following the new order. Earlier on, the firm’s CFO Quanfu Hong had expressed optimism in a market bounce back as the world gets back to its feet.

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Author: Edwin Munyui

What’s Happening on the Bitcoin Network Amidst The Red Hot Market?

Miners are reaping the fruits of rising BTC price and fees as blockchain activity continues to ramp up.

Bitcoin continues to smash new record highs, the latest one being $35k and nearly $36k. But this has just started and we have a long way to go.

This ATH came after the market had a 20% pullback on Monday providing a ‘buy the dip’ opportunity. “A large pullback of 20% – 30% should be expected, even in a bull market,” noted Arcane Research.

And this drop has been the result of sky-high funding rates and of course an overly confident market that led to $1.2b worth of longs getting liquidated in the BTC futures market — by far the largest daily liquidation since BTC started moving a few months ago.

After normalizing, these funding rates have started rising back up already.

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What’s just as interesting is the activity the largest crypto network has been seeing.

This price action has actually been on the back of the strong volume. Leading spot exchanges crushed all the previous records by having three days with over $10 billion in volume.

“$80+ billion in trading volume in the last 24 hrs on Binance. ATH x 2!” resulting in scaling issues, noted the CEO of leading spot exchange, Changpeng Zhao.

In terms of blockchain activity, Bitcoin active addresses grew by 9.3% week-over-week to start 2021, averaging over 1.1 million per day. These addresses are actually near all-time highs.

On January 3rd, the 7-day average reached 1.15 million, just shy of the all-time high of 1.18 million set in December 2017. The number of hourly active addresses (24h MA) actually just hit a new ATH.

Network security continues to look strong as well with the hash rate growing by 11.7%, again reaching for a new all-time high.

Bitcoin miners are currently enjoying revenue of $33 million per day, as per data source Glassnode. This has been thanks to the rising BTC prices and the average Bitcoin fees that have yet again surged to $11, moving up since Dec. 13.

Between the last halving and October, the average daily revenue was at around $10 million. It has only been within 5 weeks in late 2017 that this number has been higher.

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Author: AnTy

Bitcoin Miners Busy Accumulating BTC; Revenue from Fees Surges 2300% This Year

Bitcoin Miners Busy Accumulating BTC; Revenue from Fees Surges 2300% This Year

BTC miner outflow is nowhere near the previous tops, it is actually even below the 2019 local top.

2020 has been a good year for miners given that their revenue from fees increased from $0.1 million at the beginning of the year to $1.7 million as of Dec. 20th.

The daily miner revenue increased by 31% over the past week, as miners raked in more revenue through fees amidst the strong week for bitcoin price and activity levels.

The rising prices of the digital asset pushed the average fees on the bitcoin network to past $12, a jump of more than 4,185% from the average fee of a mere 2 cents in January 2020.

Miners are also not cashing out their BTC at these prices as seen in the amount of miner unspent supply, BTC that has never left the miner address, which has been increasing since the last halving and currently stands at 1.7 million BTC. Glassnode noted,

“Despite the recent rally, Bitcoin miners are not spending more BTC than usual. The Miner Outflow Multiple, which shows when BTC miner outflow is high with respect to its historical average, is far from previous tops and even below the 2019 local top.”

BTC Miner Outflow

Source: Glassnode

Bitcoin miners’ monthly revenue has been surging since September. In the month of November, they recorded $521.69 million in both subsidy and fees, last seen in September 2019. So far, this month $443.65 million have been raked in by them in revenue.

Ever since Bitcoin halving in May, which cut down the miners’ reward in half, fees have been accounting for 8% to 12% of miners’ total revenue, up from 1% at the beginning of this year.

Interestingly, while the price of Bitcoin is currently ranging from $22k and $24k, the stocks of publicly listed BTC mining companies have been up.

In the last 24 hours, Riot Blockchain shares are up 32%, Marathon Patent Group 21.5%, and Bit Digital’s 3.8%.

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Author: AnTy

Filecoin Miners Will Receive 25% Of The FIL Rewards Immediately After A Successful Network Upgrade

Filecoin (FIL) miners set to receive 25% of their rewards instantly for miners that successfully activated the FIP-004 protocol at block number #170,000. Given that Filecoin miners are working 24 hours to verify transactions on the network, over 40,000 FIL tokens will be released to miners daily without the vesting period.

According to a message posted on Filecoin’s Slack channel by lead developer Molly, Lotus 1.1.0 upgrade has been released for download. The upgrade is mandatory for all Filecoin users who want to continue participating in the decentralized file storage system.

The new upgrade brings in a slew of changes, including activation of FIP-004 at block 170,000 on Thursday. The upgrade feature will “improve miner’s ability to reinvest FIL by making 25% of storage-mining rewards immediately available with no vesting,” the statement from Molly reads.

According to previous proposals, the FIL miners had to wait for 180 days vesting their tokens but can now immediately withdraw and reinvest 25% of the rewards. The rest of the rewards will still be vested for 180 days before being released to the miners.

Following the launch of its mainnet last week, Filecoin became a quick sensation in the crypto market, with three large exchanges listing its FIL token way before the mainnet release. However, a fear of a “miner strike” due to the rising prices of FIL token and lack of profits before the 180-day vesting period elapsed led to the Filecoin community deciding to release 25% of the miner reward immediately.

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Author: Lujan Odera

Bitcoin Miners Generating BTC at Level Last Seen Post Halving; Unphased by the Drawdown

The crypto market may be experiencing the losses, but bitcoin miners remain unphased by the beating the digital asset took the past week.

Bitcoin miners are as bullish as ever and pushing the hash rate of the network to new highs.

Breaking yet another record, miners are conducting more than 130 hashes per second, keeping the network as secure as ever.

Source: Glassnode

Bitcoin’s difficulty adjustment meanwhile shifted lower this time at 17.3 trillion. With the negative adjustment, the bitcoin miner profitability took an upswing to $0.0898, as per Bitinfocharts.

Bitcoin miner’s profitability was around $0.161 for 1 THash/s in early May when the halving took a hammer to it, and profitability dropped 54%.

In mid-July, it bottomed at $0.0674, and since then, bitcoin mining’ profitability has been trying to sustain around $0.1, with no luck, so far.

Interestingly, amidst this jump in hashing power, miners are contributing to producing Bitcoin while the difficulty of generating BTC reduced; the block time has fallen to 8 minutes 2 seconds from the regular 10 minutes.

On September 3rd, the block time to mine bitcoin was just over 11 minutes only to continue to drop from there, which means miners are generating bitcoin at a fast pace. The last time block time was at this level, and lower, was in early June, following the halving on May 11.

Average block time (minutes)
Average block time (minutes)

Like bitcoin miners who don’t care about this momentary drop in the price, investors are unperturbed just as well.

Investors are taking this as an opportunity to buy the dips as bitcoin’s address activity continues to sustain nicely after shaking out the weak hands.

“We also are seeing a nice uptick in transaction volume, indicating the rising interest around this $10k price level,” noted Santiment.

Given that despite making several attempts in the past week to break the important psychological level of $10,000, bitcoin remains above, it also speaks well for the leading digital currency.

Bitcoin, however, did break down below $10k and today went down to $9,932, after surging to $12,000 level last week, because of the unwinding of “very crowded positions” in DeFi, which “resulted in a spillover effect.”

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Author: AnTy

Iranian Crypto Miners Must Register Identities, Rigs, and Overall Size With the Government

  • The government of Iran is going after illegal crypto miners with a decree from the Cabinet of Ministers’ meeting instructing cryptocurrency miners in the country to register their businesses in designated centers within the next month.

Iran is one of the few countries that has embraced cryptocurrency mining as a legal business in a bid to increase revenues and escape the tough economic U.S. sanctions placed on the country. In a bid to regulate the crypto mining industry and eliminating confusion within the industry, the government will place monitoring controls on the company’s mining activities.

Within a month, every crypto miner is now required to disclose their identities, the size of their farms, electricity consumption, and disclose the number of mining equipment they own. The new mining activities regulations follow President Hassan Rouhani’s call for more crypto mining policies to be put in place.

The statement from the Cabinet further asked the Ministry of Industry, Mines and Trade to release the center’s list of those eligible for crypto miners to receive their registration documents. Owners of the mining devices are obliged to deliver all their devices to the mentioned centers or apply for a mining activity license within one month from the date of announcement of the mentioned list.

Early last month, Mohammad Hossein Farhangi, an Iranian Member of Parliament said the central bank should take charge of crypto regulations in the country as the country tries to align its policies on digital assets.

In April of this year, Iranian crypto miners were close to 4% of bitcoin’s hashrate.

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Author: Lujan Odera

Ethereum Core Developer Concerned about Network Health as Miners Raising Gas Limit by 25%

In the light of increasing network utilization, Ethereum miners have decided to increase the gas limit of the network from 10,000,000 to 12,500,000.

Gas fees are paid by users to make transactions and transfer smart contract data. The block size of the network is limited by the amount of gas that can be sent per block.

As such, Ethereum’s block size varies depending on the gas limit, which its protocol allows miners to adjust a bit by about 0.1% in each new block, unlike Bitcoin, which has a fixed block size.

Now, Ethereum miners are in process to increase the network’s capacity by 25% to increase the number of transactions the network can process per second, making it run faster.

“In theory, this means that the Ethereum network now has the capabilities to handle ~44 transactions per second, instead of ~35,” said Bitfly, the parent company of Ethermine, an Ethereum mining pool. “Another huge milestone for the community.”

The last time a significant gas limit was increased by miners happened in Sept. 2019, from 8 million to 10 million.

Gas usage has jumped 81% YTD and nearly 10% within a day, as per Glassnode.

Block size has already started rising, with miners voting to increase the limit. Currently, it hovers around 12,000,000. The issue with this increment is that it would make the blockchain bigger as such, making it more difficult and costly to sync and run a full node along with causing some DoS concerns as well.

Ethereum core developer Péter Szilágyi had some harsh words to share about this development, which he is against.

“TL;DR: The Ethereum miners don’t give a fuck about the long term health of the network nor about DoS attacks,” said Szilágyi.

“Ethereum miners and devs should really learn a bit of complexity analysis from Bitcoin devs. They at least figured out that math is a bitch that you don’t screw with,” Szilágyi said.

Ethereum co-founder Vitalik Buterin also chimed with “high txfees *are* making the chain much less useful for people.”

Buterin also shared that Sparkpool reached out to him about it over a month ago, and he opposed the decision to increase the fees limit because Szilágyi did. But “the last 6 weeks of high txfees have put genuine pressure on people so I don’t blame them for this decision,” he added.

Raising the gas limit means reducing the transaction fees, making the network cheaper to use. Buterin shared how he recently spent $40 just to transfer to three people. In 2020, mean gas price has increased 237%, and as we saw, two transactions spent over $5 million in fees.

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Author: AnTy

P2P ‘Ponzi Scheme’ Exchange, Good Crypto, Is Behind the $5M Transaction Fees on Ethereum

Fees paid to miners of the Ethereum network has been gaining a lot of traction lately. In 2020, it has been on an upward trend.

The total fee volume in Ether on the network increased by a whopping 336% in the past two months as mean fee volume surged from 0.00067 ETH on April 17th to 0.0027 ETH on June 15th, a spike of 300%.

However, the highlight of this fee trend was when a single transaction spent $2.5 million in fees to transfer 0.55 ETH on June 10th — the highest value ever.

The next day, a second incident was reported of another Ethereum transaction with enormous fees. This transaction was also broadcast by the same addresses and had an identical fee of 10,668 ETH.

While the first transaction was mined by SparkPool, the second one was mined by Ethermine.

Fees is Already Distributed

Ethermine has already distributed the transaction fee to the miners of its pool, after no contact from the sender for four days. The distribution was reportedly based on a miner hashrate snapshot taken at the time block 10241999.

They further clarified that in the future they will no longer interfere in the payout of large fees and will always distribute the full block reward.

Sparkpool made the same decisions and distributed the proceeds today to the miners that submitted hash to SparkPool on that day.

Today, Ethermine also announced that to prevent transactions with very high fees, the Geth team has introduced a new safety feature that will block sending txs with a fee of more than 1 ETH. This will only affect txs sent via RPC while “txs received via p2p are relayed normally.”

But who exactly was behind these massive fees?

Today, PeckShield, a blockchain security company updated that it was a small South Korean peer-to-peer cryptocurrency exchange called Good Cycle, which “appears to be a Ponzi Scheme project.”

PeckShield said the exchange is also lacking in security — the Good Cycle website uses HTTP protocol instead of HTTPS.

Good Cycle has sent the transaction to SparkPool and Etheremine with a message “I am the sender” but the time to distribute the fees to miners by the pool has already lapsed.

The exchange has also suffered “repeated” hacks. Last week, Ethereum co-founder Vitalik Buterin had shared his theory of a hacker being behind this million-dollar tx fees which may actually be blackmail. He said,

“The theory: hackers captured partial access to exchange key; they can’t withdraw but can send no-effect txs with any gasprice. So they threaten to “burn” all funds via txfees unless compensated.”

But this theory was refuted by ZenGo, a keyless crypto wallet provider which said if it would have been blackmail, the service would “defensively halt all operations immediately when they received the ransom demand” but it continued.

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Author: AnTy

Top Canadian Mining Operation Hut 8 Sees Revenues Drop for The 3rd Consecutive Quarter

  • Crypto miners Hut 8 record plummeting revenues for the third quarter in a row.
  • They have predicted a further fall in their revenue streams if the BTC price doesn’t hike significantly to offset the higher operational costs post halving.

Crypto mining firm Hut 8 have reported their Q1 2020 Financial results in line with the BTC halving event that was triggered yesterday night after the 630000th block was mined. Their posted results have indicated gradual dwindling revenues the crypto miners have experienced.

Amid global pandemic concerns Canadian based Hut 8 financial results show a trend that has extended well into their 3rd consecutive quarter. For the time between the beginning of the year 2020 to the end of March, they managed to mine 1,116 Bitcoin which generated approximately CAD 12.7 million translating to US$9.1 million a 14% drop in revenue.

They attributed this to the low number of BTC mined due to increased BTC mining difficulty. Their operational overheads also spiked significantly (CAD 12.6 million Q1 2020 from CAD 11.1 million Q4 2019) mostly because of the cold weather that results to higher electricity fees.

They have also projected further losses post halving if the BTC doesn’t appreciate as with the previous halvings. The fact that miner rewards have been trimmed by half (12.5 – 6.25 BTC) and a flat Network hash rate could cut their revenue by half.

However, the top brass is confident that there will be reduced competition in the foreseeable future as small scale miners are set to close shop as they risk not being profitable.

BTC in Holding Locked Down by Debt

Revenue streams recorded from the sales of the mined BTC were used to service their operating expenses. Notably, they only held 3000 BTC at the end of March, estimated at CAD 36 million ($ 26 million) at the time of this writing.

They managed to finance their loan with Bitfury which was facilitated by an additional loan from CAD 7 million loans from Genesis. This is the second loan secured from Genesis (first of CAD 21 million) which features a shorter refund timeline and higher collateral. This has locked up to 94% of their current BTC holdings.

Their Q2 2019 Revenues Were up the Roof

The reduction of their revenues is a sharp contrast to the impressive returns they recorded in Q2 2019. They saw a 250% increase to $28.3 million with their CEO at the time, Andrew Kiguel remarking it was the best quarterly revenue they had ever posted since their launch.

Andrew Kiguel has since been replaced current interim CEO Jimmy Vaiopoulos formerly the firm’s CFO whose position has now been filled by Kyle Appleby.

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Author: Lujan Odera