In order to maintain a level of competition, Bitcoin miners are constantly trying to upgrade their equipment by taking advantage of lower prices for GPUs. Throughout October, Bitcoin’s hash rate surged by 10.8% and set new all-time highs on a daily basis.
The increase in hash rate is only one part of what makes the Bitcoin network more secure. The hash rate is the amount of computing power required by Bitcoin miners to find a block. A higher hash requires more substantial mining rigs, which help miners mine a block and earn rewards.
After global markets regained stability following the chip shortages of 2022, the prices for graphics processing units (GPUs) decreased to a more reasonable value. This helped miners initially, as they could offset their operational costs while the cryptocurrency market was in a bear phase.
In addition, mining rig providers such as Bitmain lowered the price of Antminers in order to make it profitable for miners once again. However, according to reports, return on investment can take around 11 months for large-scale operations and 15 months retail-wise.
With rig prices continuously dropping, savvy miners are upgrading their equipment to take advantage of the situation and remain competitive. Big firms such as Grayscale have also revealed plans to invest in Bitcoin mining hardware. However, since China issued a ban on crypto trading and mining, other countries decided to provide safe havens for the displaced Chinese miners.
Among the first countries that Bitcoin miners chose to relocate their mining operations to were Kazakhstan, Canada, and Germany. Consequently, Bitcoin mining became more widely accessible as it required less support from China. Recently, Ethereum finished its transition from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) one after the Merge upgrade was completed. This means that Ethereum no longer supports GPU usage for mining purposes.
The change in mining method led Ethereum miners to sell or adapt their equipment to mine Bitcoin. Even though the increased hash rate makes the network more secure, it also means that mining revenue is struggling to recover amid the bear market.