Yesterday the well-known Fortune magazine dedicated an article to Bitcoin explaining that miners are increasing despite the halving event.
In particular, Fortune mentions a new mining farm created thanks to the support of Peter Thiel, the co-founder of PayPal and the first investor of Facebook, through the startup Layer1 that Thiel co-financed. The opening of their first 30-plus-acre bitcoin mining facility, costing tens of millions of dollars, was announced yesterday.
The plant is located about 100 miles west of Midland, Texas, where, according to Layer1 CEO Alexander Liegl, the world’s cheapest large-scale electricity is found today.
This is achieved through a mix of market deregulation, overproduction of natural gas through fracking and large investments in renewable energy through state government subsidies. In fact, the sources used by Layer1 are mainly wind power, with a part coming from natural gas.
Fortune also mentions other companies in the sector, such as Hut 8, Bitmain and Bitfarms, which have expanded their existing facilities or built new ones.
Moreover, the total hashrate of bitcoin is steadily increasing, which confirms what Fortune has pointed out.
The fact is that in May of this year, due to the halving event, the reward for the miners will be cut in half, resulting in an absurd race towards increasing investment in bitcoin mining.
Fortune’s article comments on this apparent absurdity by saying that the long-term value of an investment in bitcoin mining will always depend on the price of the cryptocurrency, and that halving is expected to have a negative impact especially on those plants that use older, more energy-efficient machines, allowing miners using new, more efficient machinery to gain a larger share.
In addition, the halving itself, by reducing the amount of new BTC created and placed on the market, could increase their dollar value, offsetting the losses due to the halving of rewards, which of course are distributed in BTC.
If anything, new structures like Layer1 could actually benefit from the halving due to the low cost of electricity, provided they remain more efficient than the competition.
Liegl himself states in this respect:
“We don’t care about the halving at all. We just care about beating our competitors”.
Finally, the fact that a mainstream magazine such as Fortune is interested in bitcoin mining, and any issues arising from the halving, is a good indication of how these technologies are now becoming of common interest, although for the time being, they are still only in the strictly technical or financial sphere.
Surely famous investors like Peter Thiel are playing a fundamental role in this, demonstrating that they really want to get serious with what only a few years ago was described as nerd games, or pyramid schemes ready to collapse.