More companies are making use of the energy and data centre space freed up after the upgrade of the ethereum network.
computing power dedicated to bitcoin mining surged to a record as more companies made use of the energy and data centre space freed up after the upgrade of the ethereum network, likely further compressing profit margins.
Known as the Merge, ethereum’s technical upgrade has replaced as many as one million powerful computers with ether holders to validate transaction data encrypted by the network and reduce its carbon footprint by 99%. Ether miners have to unplug their rigs as they no longer get token rewards after the Merge, leaving extra space in data centres to host bitcoin mining machines and more electricity to power the rigs.
“Rack space for bitcoin miners was limited, freeing up the space paves the way for machines previously unplugged to get plugged in,” said Ethan Vera, chief operations officer at crypto-mining firm Luxor Technologies, which has provided services to both ether and bitcoin mining companies. Vera estimated around 4% of the current computing power for bitcoin mining has been flowing from ether mining to bitcoin miners in the past two weeks.
Ether mining consumed about half of the energy used for bitcoin mining before the Merge. While small miners run graphic cards at home, industrial-scale crypto miners operate tens of thousands of the cards in their facilities.“What’s critically important for bitcoin mining is access to cheap electricity,” said Matthew Kimmell, digital asset analyst at crypto asset manager CoinShares.
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