Crypto mining came to life when Satoshi Nakamoto mined Bitcoin’s genesis block — the very first Bitcoin block ever made — fueling the start of a financial revolution. Fast forward into the future, and crypto mining has transformed into a thriving industry with a constantly growing community, with many motivated by the riches that can be found within the alluvial deposits of cryptographic hashes.
Mining is an integral mechanism within the world’s most-used blockchains, Bitcoin and Ethereum. With the proof-of-work algorithm, miners verify and confirm the validity of transactions to prevent double-spending. As a reward for their contribution to the ecosystem, they receive a specific amount of crypto.
As the prices of cryptocurrencies soared, more flocked to join the business, pushing global mining hash rates to new all-time highs. However, because crypto mining requires a lot of energy, it also caught the attention of environmental advocates, leading to intense back and forths between global leaders and influencers with different stances on the issue.
The crypto world rejoiced when Tesla CEO Elon Musk announced in March that his company would start accepting Bitcoin as payment for its products. However, the celebrations were short-lived, as the billionaire soon shared in May that the company would stop accepting it, citing environmental concerns. As a response, Bitcoin advocate and MicroStrategy CEO Michael Saylor joined with the largest North American Bitcoin miners to meet with Musk and discuss the matter. Shortly after, the Bitcoin Mining Council was formed to promote the transparency of Bitcoin’s energy use and to advance sustainability initiatives around the globe.
At the start of the year, Chinese miners were the largest contributors to global hash rates, but that changed rather quickly. Back in 2019, China began implementing laws that prohibited mining, and in September 2021, the country doubled down on its stern anti-mining stance by implementing a blanket ban on crypto trading and mining. This resulted in a massive downtrend in worldwide mining hash rates as Chinese miners had no choice but to take their businesses to other countries such as Kazakhstan, the United States and Canada. However, while the move boosted Kazakhstan’s hash rate to No. 2 worldwide, the party didn’t last long due to energy troubles engulfing the country.
Overall, Bitcoin’s hash rate experienced somewhat of a roller coaster in 2021. In April, it recorded a new all-time high of 198.51 exahashes per second (EH/s). However, due to China’s crackdown on mining, the hash rate dropped to a low of 58.46 EH/s near the end of June. It then made a comeback, shooting up to a new all-time high in the final days of the year as miners ultimately settled down in their new locations outside of China.
While 2021 spurred mixed opinions on crypto mining, the community continues its journey as it faces a new year. At the start of 2022, the Bitcoin network celebrated the 13th anniversary of Satoshi mining its genesis block with a new all-time-high hash rate of 207.53 EH/s.
Prominent investor and Shark Tank star Kevin O’Leary has predicted that there will be new trends in crypto mining in 2022, including sovereign mining operations wherein governments invest in their own crypto mining infrastructure. An example of this is the expressed ambitions of El Salvador’s president, Nayib Bukele, to use the geothermal energy from the country’s Conchagua volcano to mine BTC.
Apart from governments jumping into mining, O’Leary also highlighted that there’s a strong possibility the issues faced by the mining industry will lead to sustainable mining practices that are government-approved and accepted by communities where mining operations are stationed.
Mining
