Despite Bitcoin trading around 50% below its all-time high of $20,000, the hash rate of the network has surpassed 100 exahashes per second — an astronomically-large number of hashes per second that is an order of magnitude larger than the hash rate at the date of the $20,000 high.
The increased competition, interestingly enough, hasn’t stopped upstarts from expressing interest in investing large amounts of capital in Bitcoin mining.
In fact, a company invested in by legendary PayPal co-founder Peter Thiel just revealed that it has launched a massive and soon-to-be-even-more-massive Bitcoin mining operation in Texas, boding well for the security of the world’s first blockchain.
Bitcoin Mining Space Sees Notable Entrant
Late last year, Layer1, a San Francisco-based company that is a part of the portfolio crypto conglomerate Digital Currency Group, revealed that it had shifted operations from investing to mining.
In October, the company raised $50 million at a $200 million valuation, securing investments from Peter Thiel, Shasta Ventures, and crypto industry leaders, while promising to become the first Bitcoin mining company in the U.S. “at scale.”
Indeed, it seems the company is trying to accomplish this. In a press statement shared with industry outlet The Block, Layer1 revealed that it has officially launched its mining operation in Texas, purportedly bringing online several containers that have a 2.5-megawatt capacity each.
The exact extent of the farm wasn’t disclosed, though the statement mentioned that Layer1 is likely to control 2% of the entire Bitcoin network’s hash rate in the coming months.
Eventually, by the end of 2021, Layer1 wants to control 30% of all of Bitcoin’s hash rate through the Texas site and others they have control over, which would likely make the company that largest BTC miner if they achieve the accomplishment.
Layer1 is One of Many
Layer1 isn’t the only firm setting up relatively large-scale Bitcoin mining operations in North America.
Per previous reports from Blockonomi, SBI Holdings — a financial services company group based in Tokyo, Japan that works closely with crypto-centric fintech upstart Ripple — and GMO Internet recently signed an agreement with Whinstone.
Whinstone has control over a Rockdale, Texas-based facility that will have a mining capacity of 1 gigawatt by the end of 2020, purportedly three times larger than that of Bitmain’s Rockdale mine, which currently holds the title for the world’s largest crypto mine.
The agreement will see the two firms begin using Whinstone’s facilities “within the coming months.”
Also, Blockstream, the Bitcoin infrastructure developer, in 2019 launched a mining co-location service, allowing third parties to set up their machines in facilities set up and managed by Blockstream.
The two facilities the company has in Quebec and in Georgia have an aggregate energy capacity of 300MW. Thus far, the service is being used by Fidelity Investments, the prominent Wall Street firm that has been mining Bitcoin in-office for years; pro-crypto LinkedIn founder Reid Hoffman, and Blockstream itself, which claims to have machines that power “less than 1%” of the Bitcoin network.
Decentralizing the China-centric Crypto Mining Industry
All these efforts are moving the largely China-centric crypto mining industry out of China, a move that analysts say is bullish for the decentralization of Bitcoin and other top blockchains.
Just recently, Ripple’s CEO, Brad Garlinghouse, brought up the issue of China’s control over the Bitcoin network in an interview regarding blockchain with CNN. “China controls the Bitcoin blockchain,” he said, before elaborating that there are “4 miners in China that represent 60% or more of total mining capacity for Bitcoin, and 80% of the mining capacity for both Bitcoin and Ethereum is based in China.”
While this was debunked as an inaccurate take on fact, the fears that China’s miners are dominating the Bitcoin network, which may lead to contentious forks in the future if backdoors are found or pool operators collude to 51% attack the network, remain potent.