Bitcoin mining metrics for March 2021
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Bitcoin mining metrics for March 2021
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Oil and gas producers continue to adopt bitcoin mining.
Monthly Mining Metrics
March 2021
February and March were extremely busy months for Upstream Data as we saw record orders and several first time customers who decided to transition from our trial agreements to full commercialization at their facilities.
We’ve been so busy hiring and completing orders that I completely forgot to issue this newsletter last month. Oops, sorry about that!
Difficulty significantly lagging price action
If you recall in previous newletters, the Chinese “wet season” ended in October 2020 and we saw a marked decrease in the network difficulty at that time due to miners shutting down in China when the rivers literally reduced flowrate, decreasing surplus hydroelectricity capacity.
At the same time the bitcoin price started appreciating and it has since increased approximately 600% and the difficulty has not even doubled. The result is a marked increase in revenue for bitcoin miners everywhere.
To be honest I am a bit surprised at how slow the difficulty and hashrate has been to react to the price, but this is likely due to the significant shortage in the semiconductor industry combined with existing mining hardware failure (hardware breaking). With no relief in the semiconductor supply chain in sight, (https://www.theguardian.com/business/2021/mar/21/global-shortage-in-computer-chips-reaches-crisis-point) I would guess bitcoin mining will continue to be extremely profitable for quite some time to come.
Considering much of the network is still mining using Antminer S9s and similar generation hardware (which is 5 years old now), new ASICs at much higher efficiency seem to barely be outpacing the network hardware failure rate.
Mining hardware prices skyrocket
Bitcoin mining computers (ASICs) are as volatile as the bitcoin price itself. In recent months, with mining revenue / kWh spiking, so has the value of computers.
New entrants into bitcoin mining, such as our oil and gas customers, aren’t used to such price volatility in hardware. With computer pricing and availability changing daily, no doubt it makes it more difficult to pull the trigger on an investment in bitcoin mining.
When times are good like they are now the computer prices and revenue skyrocket, when times are tough computer pricing plummets. All of our customers who bought into our products during the summer of 2020 (when times were super tough) have made a killing with their hardware value appreciating over 6x, not to mention revenue gains.
What is important to keep in mind is that the best time to invest in bitcoin mining is yesterday.
[Rig price data above is sourced from Hashrate Index (https://hashrateindex.com/machines/sha256-rig-index)]
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Burning natural gas has never been more costly...
Producers who have invested in our products using worst-in-class ASICs are earn over $10 USD/mcf at current market prices.
So why don’t you consider pausing that combustor / flare capital program and diverting a small portion of that capital into trying out one of our Hash Generators? (https://www.youtube.com/watch?v=VNrrpbtHtpg)
Why not invest in your gas instead of paying “suppliers” to burn it? With our products:
• Make a return on your capital deployed
• Invest in portable equipment you can move to any facility which meets all spacing and regulatory requirements
• Improve your ESG story by reducing vent and combustion volumes
• Earn carbon credit revenue on top of revenue from mining
Over 75 Ohmm™ datacenters installed across North America!
At Upstream Data, we have been focusing on bringing bitcoin mining products to oilfield longer than anybody and have developed numerous proprietary products that fit every producer’s needs.
Are you hesitant to mine bitcoin off your natural gas because you are not sure how to handle bitcoin at the corporate level? Are you wondering about taxes, royalties, carbon tax and other uncertainties?
Get in touch with our sales team today (https://www.upstreamdata.ca/contact-us)and we can answer all of your concerns.
We can even keep you at arms length from touching bitcoin, we will handle and buy your mined coins from you at market rate any time and issue you payment in CAD or USD.
There is absolutely no reason not to get involved today!
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New to Bitcoin? We're here to help!
We’ve been helping oil and gas producers increase revenue, reduce GHG emissions and generate bitcoin since 2017
If you enjoyed this content don’t forget to share and get all of your oil and gas friends and family to subscribe (https://www.upstreamdata.ca/)
For more information please contact sales@upstreamdata.ca
Big thank you to Coin Metrics (https://coinmetrics.io/) for the public data used to derive our charts above
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