BREAKDOWN: Network to Undergo Biggest Difficulty Adjustment Ever; BMC Says 67.6% of North American Bitcoin Mining Is Sustainable
CoinDesk Podcast Network
CoinDesk
4.8 • 689 Ratings
🗓️ 2 July 2021
⏱️ 11 minutes
🔗️ Recording | iTunes | RSS
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Summary
But how much do people trust the Council’s methodology?
This episode is sponsored by NYDIG.
Today on “The Breakdown,” NLW looks at the latest in the highly dynamic, fast-evolving world of bitcoin mining, including:
- China’s mining ban and the “Great Western Hashrate Migration”
- Bitcoin’s built-in hashrate fluctuation mitigation, the “difficulty adjustment”
- The Bitcoin Mining Council’s newest sustainable mining figures
China’s expansive mining ban, including regions with hydroelectric power, forced China-based miners to liquidate some of their crypto in preparation for a move elsewhere. Where will hashrate move next? Will miners join U.S. crypto-friendly jurisdictions like Texas and Kentucky, or will they stay close to home in bordering countries like Kazakhstan and Russia?
The ban induced a massive reduction of hash power on the network. Luckily, Satoshi prepared for such a circumstance and built in a concept of “difficulty adjustment” into Bitcoin’s protocols, which allows for fluctuation in the composition of miners. The adjustment expected to be made tonight will be the highest adjustment ever made on the network.
Lastly, NLW addresses a report released by the Bitcoin Mining Council on sustainable energy disclosures. This report’s feature number, 56% of mining electricity mix is sustainable in Q2 2021, has some groups excited while others remain skeptical of the validity of the report. As NLW argues, “Some data is better than no data.”
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NYDIG, the institutional-grade platform for Bitcoin, is making it possible for thousands of banks who have trusted relationships with hundreds of millions of customers, to offer Bitcoin. Learn more at NYDIG.com/NLW.
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Transcript
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| 0:00.0 | Welcome back to The Breakdown with me, NLW. |
| 0:09.1 | It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. |
| 0:16.3 | The breakdown is sponsored by Nidig and produced and distributed by CoinDesk. |
| 0:22.6 | What's going on, guys? It is Friday, July 2nd, and today we are discussing mining. |
| 0:28.1 | It's a brave new world out there, and things are happening fast. |
| 0:32.3 | Here's a recap in case you spent the last month, I don't know, hiking the Camino de Santiago or something, without an internet connection. Towards the middle end of May, the vice premier of China started talking about a |
| 0:41.6 | Bitcoin mining ban. The Twitterati initially rolled their eyes at yet another China ban's |
| 0:46.4 | crypto story, but, interestingly, China-based miners did not. They started spring into action |
| 0:52.1 | almost immediately, including liquidating some amount of |
| 0:55.0 | their crypto to be able to act more nimbly. Over the following month, we saw numerous state-level |
| 0:59.7 | implementations of a Bitcoin ban, including in a province that mines primarily with hydroelectric power. |
| 1:06.1 | At first, there had been questions about whether it would be solely coal-powered mining targeted by |
| 1:10.5 | this ban, |
| 1:11.1 | but it turns out that no, it was mining in general. There has been a ton of discussions about |
| 1:16.3 | motivations. Some have argued it's about ESG concerns and green goals. Others have said it's about |
| 1:21.6 | China turning their focus from attacking fintech to attacking crypto in order to clear any competition |
| 1:26.5 | for their digital currency. |
| 1:28.4 | Still, others have speculated that it's about fears of social destabilization that come |
| 1:32.4 | with crypto while still others say it's about cracking down on local corruption. |
| 1:36.8 | Whatever combination of these things and others is correct, it has happened. |
| 1:41.5 | As you heard on Longreed Sunday last week, the broad sense is that the great |
| 1:44.9 | western hash rate migration is real. That being said, there is still a ton up in the air. |
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