Bitcoin mining has been a hot topic in recent years, with the difficulty of generating new coins increasing exponentially. One can only imagine what will happen when Bitcoin approaches its maximum supply of 21 million coins. In this article, we’ll explore some of the most compelling emerging trends in Bitcoin mining for 2022 and how they will shape the industry’s future.
Let’s take a look at these trends.
1. Hashrate doubling
The hash rate of the Bitcoin network is expected to double by 2022. This will be due to the increase in the popularity of Bitcoin and the number of miners joining the network. As a result, it will become more difficult to mine Bitcoins, which means that the cryptocurrency will continue to move towards becoming more centralized.
The current mining pools are expected to grow bigger by then, which is a major concern for many crypto enthusiasts. Bitcoin Prime is an amazing app to start trading bitcoin with complete privacy and security.
2. Rise in M&A
The consolidation of the cryptocurrency mining industry is continuing, with large companies acquiring smaller ones to increase their market share. In one example, in 2018, Bitmain Technologies Ltd., a major Chinese-based operator of bitcoin mines, acquired an Israeli startup called Neuromining LTD for $ 400 million.
The deal was designed to help the company become more competitive by increasing its access to artificial intelligence (AI) technology.
3. New mining technologies
New mining technologies are emerging to combat the scaling issue that Bitcoin is currently facing. One of these new solutions, known as Proof-of-Stake or PoS for short, will likely be implemented on top of Bitcoin’s blockchain by third parties who have developed their coins with this solution already.
This would allow them to offer customers lower transaction fees while still complying with KYC/AML laws since they are built on the same network.
4. Margin compression
Margin compression reduces the price difference between buying and selling prices. This happens when there is an increase in supply or a decrease in demand. A perfect example of this would be the current state of the cryptocurrency market, where prices are dropping rapidly.
This trend will likely continue into 2022 as miners face increased competition and decreasing profits. As a result, many miners will be forced to exit the market, further contributing to margin compression.
5. ESG and low-cost power
ESG (environmental, social, and governance) investing will become more important to miners as they seek to reduce costs. Low-cost power sources like hydro and wind will continue to demand as miners look for ways to keep their operating expenses down.
6. Value investors vs. fast money
In the early days of Bitcoin, miners could generate coins by using their home computers. However, as more people got interested in mining and the difficulty increased, miners invested in faster and more powerful hardware. This led to a separation between those who could afford to mine bitcoins and those who couldn’t.
The ones who could afford it became known as “fast money” because they could quickly turn a profit simply by investing in mining hardware. The rest of the community was known as “value investors” because they believed in the long-term potential of Bitcoin and were willing to wait for their rewards.
The Bottom Line
Bitcoin mining is constantly evolving and changing. While some trends may stay the same, others will emerge in 2022. Keep an eye out for these trends when planning your bitcoin mining strategy.
