With mining computational difficulty down, and new Bitcoin production only costing $4,000, there has never been a better time to be a Bitcoin miner. The profitability is comparable to when Bitcoin was trading at $50,000, but this time the deal is sweetened with mining equipment going at half price.
Some analysts are suggesting a dip to $25,000 before another potential bull run, but even if this does occur, mining will remain highly profitable during the bear run. Mining difficulty will remain depressed, currently at a 28% drop at the time of writing, until infrastructure catches up to the numbers of displaced miners due to ongoing restrictions in China. As equipment supply from China starts to dry up, mining prices won’t stay this low for long. Mining rigs are currently earning $1,000 per day, so costs will recoup within weeks. Wait too long and you'll miss out on the mining opportunity of a lifetime.
Solution for the Hosting Space Shortage?
The mass exodus of miners from China frantically hunting for a new location to host their equipment has led to hosting space shortages across the world. These miners are seeking locations with low temperatures, cheap electricity, a tolerant governing authority, and, ideally, a power surplus that would otherwise be wasted. However, the logistics of moving miners across the world have proven tough for even the largest Bitcoin mining firms.
While Kazakhstan has proven itself to be a Bitcoin mining hotspot that’s here to stay, even that region does not have ready-to-use space that is able to keep up with the demand. Data centers in Kazakhstan, including Hive Mining, reported a huge increase in hosting inquiries once the Chinese ban was implemented - however, the process is difficult and space is running out. Before installation, miners have a slew of activities they must complete in order to properly prep the machines. This includes collecting your individual machines from across China, testing them, cleaning and packing them, shipping them to their end destination, and finally getting them through customs. The process of shifting operations for hundreds of thousands of miners is no easy feat.
Mining in Texas: The Ideal Environment
Texas has all the makings of the perfect region to host mining operations, and has already caught the attention of miners around the world. It also boasts a deregulated power landscape, meaning companies can choose their energy provider. These providers offer some of the cheapest energy in the U.S., especially given that the state is known for its oil and gas business. There is seldom a shortage of energy in Texas.
Software start-ups like Lancium provide Texas miners the option to adjust their power consumption to react to fluctuating prices, minimizing operations when it is less profitable. Bountiful energy and innovation have built Texas up to be a Bitcoin miner haven.
Compute North, a Bitcoin mining data centre across multiple Southern states, including Texas, has reported mass inquiries from Chinese miners looking for space to host. They are accelerating expansion plans to meet this demand, hoping to have large-scale deployments in the first half of 2022.
Compute North CEO Dave Perrill shared his thoughts: "There's no doubt in my mind that we're going to see a lot of computers sitting in warehouses for the next six, nine, 12 months as the infrastructure catches up."
Getting Paid for not Using Power
Texas is also garnering interest from American Bitcoin miners for its deals that entice miners into the area, who provide mutually beneficial advantages such as assisting during power outages and increasing local jobs. Whinstone Inc., the largest Bitcoin mine in North America, has taken advantage of the ideal environment in Texas, but has also provided support to the local community.
During a strong heatwave in early 2021, the Texas power grid was struggling to withstand the amount of power required - which is where Chad Harris, the CEO of Whinstone Inc., stepped in. He ordered the plant to shut off once notified about the power shortage, turning off tens of thousands of computer systems. While this temporary shutdown could result in a huge drop in profits for the mining farm, the Electric Reliability Council of Texas, which is the state’s electricity operator, paid Whinstone Inc. for their lost profits and agreed to quit power purchases during necessary demand.
This agreement caught the attention of many miners hoping to find a place within America, especially those displaced due to China’s heightened regulations. It also caused Whinstone Inc. to create plans for doubling the size of their mining facility. Among these interested parties, two key leaders within the Bitcoin mining industry stand out: Bitmain and BIT Mining. Bitmain is fixing up an old aluminum plant in Rockdale, the same city in which Whinstone Inc. has set up operations. BIT Mining announced in May that it will be investing $25 million into the creation of a data centre in Texas. Other notable companies already within Texas include Layer1 Technologies, backed by Peter Thiel, who is often known as being the first outside investor into Facebook, and Argo Blockchain, a Canadian company. As money pours into Texas to create new hosting infrastructure, it may become the next Bitcoin mining place of interest.
New to Bitcoin Mining?
Wattum provides services to help you pin down the perfect time to purchase your mining equipment, which is ideal for both emerging enthusiasts and seasoned miners.
“The Wattum Bitcoin Mining Advisory program consists of industry experts, our valued Bitcoin Mining Advisors, who are dedicated to helping you understand your options and will answer your questions in relation to Bitcoin production, Bitcoin colocation and facilities, and can help you curate a design and actionable structure around these options.” We are committed to supporting you throughout the process of becoming a Bitcoin miner and are dedicated to helping you find the option best suited to your needs.
Timing the purchase of your equipment can be difficult to understand, especially if you’re new to the cryptocurrency community. Wattum has compiled comprehensive support knowledge over our many years of experience on the optimal time for getting into mining. Partnering with an industry expert can provide you with the baseline fundamentals needed to understand the industry, and can help you learn how to maximize your profits in the long-term.