Bitcoin Mining Headlines for September 2021
September 30, 2021 - Crypto News
Wake me up when September ends.
The famous hit by Green Day may only loosely fit this context, but you get the idea. Another month has come to an end, and it is time to highlight headlines from September. To revisit the Green Day reference, these are some events that the mining landscape woke up to in September.
The cryptocurrency sector has a typically action-packed month. As always, there was a fair share of good and bad news to go around. Bitcoin appears to hold steady around the $50k mark, which is a welcome relief for HODLers after the tumultuous past few months.
Here are a few other stories of note in this period:
- Riot Blockchain Leads North American Miners in Gains
One of the leading crypto miners in the U.S., Riot Blockchain, announced that it had tripled its Bitcoin production in September, building up its Bitcoin reserves significantly. The company was able to mine over 400 Bitcoins in September, three times the number realized in August. Such is the scale of operations that major North American miners are undertaking.
In dollar terms, that is approximately $20 million worth of Bitcoin!
Riot Blockchain has upped the ante this year. Year to date, it has mined close to 2,500 Bitcoin, which is almost double the rate it was operating last year. The significant change between the two years is the massive Bitcoin rally that came about and the ban of mining in China, which placed North American miners at a vantage position. Riot Blockchain is one of the few listed Bitcoin-related companies in America.
Large miners bought equipment in droves. This rapid purchase led to a supply shortage of Bitcoin mining equipment. Companies like VBit Mining that have a direct line to manufacturers like Bitmain were lucky in this regard. Major miners are likely to continue stepping on the gas pedal for the foreseeable future.
- The Bitcoin Mining Hash Rate Continues To Recover
China’s ban on Bitcoin mining was a devastating event for the Bitcoin mining hash rate.
A few days after the ban, the network experienced a hash rate decline not seen in years.
By mid-September, the hash rate had climbed 128 percent. This hash rate recovery indicates Bitcoin mining equipment coming back online or new equipment joining the network.
The China crackdown took the Bitcoin mining hash rate to lows of 69 EH/s, but it is now back over 150 EH/s. There will be a resultant increase in mining difficulty, rendering older equipment that came back after the difficulty collapsed redundant again.
- China Is Not Relenting In Its Crackdown
Bloomberg reported that China took its crackdown on Bitcoin miners to another level in September.
The government is now going after secret miners in an attempt to eradicate this industry.
Authorities conducted inspections on various facilities to identify miners who attempt to disguise themselves as researchers or storage facilities.
The inspections intensified in September. This escalation showed that the Chinese government is not relenting in its crackdown.
Mining in the country effectively collapsed once the crackdown went into effect. The government cites electricity usage concerns over the upcoming winter season as justification for the urgency.
Some miners probably thought they could take their chances and mine secretly even after the ban went into effect. It appears that this strategy will not work given the government’s resolve.
- Chinese Miners Continue To Find New Homes Abroad
One man’s meat is another’s poison.
Well, that quote just about sums up the contrast between the fortunes of Chinese miners and the rest for the past 3 months.
CoinTelegraph reported that Kazakhstan had grown its share of international Bitcoin mining from less than 2.6 to over 8.6 percent in September.
This shift is indicative of miners migrating from China and starting up shop abroad.
Russia is another of China’s neighbors that have had an uptick in mining activity. Notably, American miners had already started expanding rapidly even before the China ban. It will be challenging to determine what percentage of the increase in mining is attributable to the Influx of Chinese miners.
- Developing Countries Are Some of the Most Active Crypto Markets
One beautiful aspect of cryptocurrencies is that they are borderless.
There are no restraints from national exchange rates and currency controls. Accordingly, people in developing countries with stuttering currencies have more cause to use crypto.
Bitcoin and other cryptocurrencies can facilitate seamless remittances as well.
The India Times did a piece on crypto usage in Nigeria, the Philippines, Argentina, and Vietnam. These countries have different political and social trends, and all face unique challenges.
Nonetheless, cryptocurrency usage is increasing in all of them. The piece highlighted how stiff regulation and high remittance costs in Nigeria are pushing people towards crypto.
The Philippines is also a significant remittance destination. It has a reasonably favorable crypto regulation regime which is allowing this industry to thrive. Such is the versatility of cryptocurrencies.
The constraints of fledgling national economies, borders, and currency controls can no longer be absolute with the opportunity of a new asset to store and transfer value.
- Ethereum Had a Rough September
Bitcoin’s closest competitor did not have a great month.
ETH dropped 13 percent in September, which was the second-largest drop this year. Admittedly, crypto prices are a wild roller coaster ride.
There is no point declaring doomsday over momentary blips.
Notably, the network was undertaking its London Upgrade during the month. This upgrade was to rein the wild transaction fee fluctuation that Ether exhibits. However, its effects in the short term have not gone to plan.
The Ethereum network occupies a unique position in the crypto landscape. Its champions have claimed that it will eclipse Bitcoin one day in value. However, Bitcoin has crystallized its store of value credentials, and this is unlikely to happen soon.
Alternatively, Ethereum could continue to solidify its decentralized finance credentials. This provision of utility services is where Ethereum thrives best. It has to watch out for upcoming competitors like Cardano, who are seeking to dislodge Ethereum.
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