These North American Bitcoin Firms Mined 59% More Bitcoin in July

The Breakdown

Blockworks

Investing, Business

4.8 • 786 Ratings

🗓️ 14 August 2021

⏱️ 12 minutes

🔗️ Recording | iTunes | RSS

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Summary

On this episode of “The Breakdown:” Bitcoin mining bump Coinbase’s massive Q2 earnings and more institutional news Crypto tax companies popping up North American bitcoin mining companies saw a significant increase from the previous month. Contributing to this increase is the downward difficulty adjustment, a built-in and automatic Bitcoin feature that incentivizes more miners to join the network. The adjustment came after China’s crackdown on their miners and a subsequent drop in hashrate. Is this mining success bullish for bitcoin? Coinbase’s Q2 earnings report revealed a successful quarter with a bigger portion of trading volume attributed to institutional over retail. Additionally, ethereum surpassed bitcoin in trading volume for the first time. Will these trends continue? With regulatory pressure on the horizon, several new crypto tax companies are being formed (and venture capital-backed) to fill the gap. Crypto presents new complexities for reporting and the tax implications of the U.S. infrastructure bill are imminent. Will these companies be able to find a solution when it’s tax time? Enjoying this content? SUBSCRIBE to the Podcast Apple: https://podcasts.apple.com/podcast/id1438693620?at=1000lSDb Spotify: https://open.spotify.com/show/538vuul1PuorUDwgkC8JWF?si=ddSvD-HST2e_E7wgxcjtfQ Google: https://podcasts.google.com/feed/aHR0cHM6Ly9ubHdjcnlwdG8ubGlic3luLmNvbS9yc3M= Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW “The Breakdown” is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Only in Time” by Abloom. Image credit: eclipse_images/iStock/Getty Images Plus, modified by CoinDesk.

Transcript

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0:00.0	Welcome back to The Breakdown with me, NLW.
0:09.0	It's a daily podcast on macro, Bitcoin, and the big-picture power shifts remaking our world.
0:16.2	The breakdown is sponsored by Nidig and produced and distributed by CoinDesk.
0:22.5	What's going on, guys? It is Friday, August 13th, who-hoo, Friday the 13th,
0:27.1	and the theme of today is all the bullish news you might have missed if you, like me,
0:33.1	were intensely watching the floor fight in Washington over the last week or so.
0:39.5	Or if unlike me,
0:44.5	you just have a life and other interests. Either way, here is your breakdown of bullish news.
0:50.4	And let's start right in with the title story. Five publicly traded North American Bitcoin mining companies increased their Bitcoin output significantly in July, producing 1,802 Bitcoin,
0:56.6	which is about a 59% increase on the month before. These firms include Marathon Digital, Riot
1:03.3	Blockchain, Argo Blockchain, BitFarm, and Hut 8. How did these firms increase their output so much?
1:09.9	Well, it wasn't an increase in the power that
1:12.4	they were throwing at mining, but instead, the fallout of the massive downward difficulty
1:17.1	adjustment from the month before. For those unfamiliar, Bitcoin's difficulty adjustment is a
1:22.2	process that happens every 2016 blocks, or roughly every two weeks, in which the Bitcoin protocol automatically changes
1:30.1	the difficulty of the puzzles solved by miners. If more miners are coming online, it can adjust
1:35.9	the difficulty up, making it more difficult to win blocks. If, on the other hand, miners leave
1:41.5	the network, it adjusts the difficulty down.
1:48.8	That downward adjustment incentivizes more miners to come online to capture the now easier to achieve rewards, and so on and so forth.
1:52.5	In short, it's a mechanism for keeping the Bitcoin network's security and functioning
1:56.5	impervious to exogenous shocks.
1:59.2	I've said before, and I'll say it again, I think difficulty
	...

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