5 On-Chain Metrics Indicate Bitcoin Bull Run is Far from Over

5 On-Chain Metrics Indicate Bitcoin Bull Run is Far from Over

There are five key on-chain indicators that suggest a bullish outlook for the price of Bitcoin. With market dominance above 54% and miner revenue per hash still strong, the data points to more potential gains ahead.

Bitcoin market dominance is above 56%

Historically, when Bitcoin (BTC) dominates the crypto market, it’s often a sign of a bull market. Traders typically sell their altcoins during bear markets, which increases Bitcoin’s market share. 

Conversely, when Bitcoin’s dominance drops and the altcoin season begins, it indicates that the bull market is nearing its end. 

As of May 2024, according to CoinMarketCap, Bitcoin’s dominance is still high at over 54%. Since October 2023, Bitcoin’s market share has remained above 50%.

5 On-Chain Metrics Indicate Bitcoin Bull Run is Far from Over

Source: CoinMarketCap

Bitcoin’s market dominance and its correlation to a period of bull run

  • In mid-2015, after a prolonged bear market, Bitcoin’s dominance increased from around 40% to over 60%, which preceded the 2016-2017 bull run.
  • In 2017, Bitcoin’s dominance rose from 37% in January to 66% by June, before the famous bull run that culminated in Bitcoin reaching nearly $20,000 by December.
  • After the 2018 bear market, Bitcoin’s dominance grew from around 33% in January 2018 to over 70% by September 2019, preceding the 2020-2021 bull run.
  • During the market recovery in early 2019, Bitcoin’s dominance steadily climbed from around 50% in January to over 70% by September.
  • In late 2020, Bitcoin’s dominance surged above 50%, signalling the start of a major bull run that saw Bitcoin’s price rise from around $10,000 in September 2020 to over $60,000 by April 2021.

Bitcoin MVRV Z score under six

The Bitcoin Market Value to Realized Value (MVRV Z) score is a measure that compares Bitcoin’s current market value to its historical average. 

This score tends to peak around six during market cycles. Currently, the MVRV Z score is below three and hasn’t exceeded six since March 2021, according to LookIntoBitcoin.

5 On-Chain Metrics Indicate Bitcoin Bull Run is Far from Over

Source: LookIntoBitcoin

Puell multiple not above three

The Puell Multiple is another indicator used to identify market cycle peaks. It’s calculated by dividing the daily value of Bitcoin mined by the yearly moving average of that value. 

According to Coinglass, the Puell Multiple fell below one after the halving on April 20. Peaks above three are usually seen at cycle tops, and the highest it reached during the 2024 price surge in mid-March was 2.4.

Source: Coinglass

Hodl waves

Charts that analyse the amount of Bitcoin held by different groups, known as hodl waves, also suggest a bullish outlook for Bitcoin. 

Realized cap hodl waves provide insights into how much Bitcoin is held by recent buyers versus long-term holders. A decline in peaks among newer holders indicates that selling pressure might have lessened, potentially paving the way for further gains.

5 On-Chain Metrics Indicate Bitcoin Bull Run is Far from Over

Source: Glassnode

Bitcoin miner revenue per hash

Another bullish indicator is the miner revenue per hash, which tracks how much money Bitcoin miners earn. 

A terahash (TH/s) is a unit of measurement used in cryptocurrency mining to indicate the speed at which a computer can process complex calculations. Specifically, it represents one trillion (1,000,000,000,000) hash calculations per second. 

The higher the terahash rate, the more calculations a miner can perform, increasing the chances of successfully mining a block and earning rewards.

Although this metric tends to decline as network difficulty increases, past spikes to $0.3 per terahash have coincided with market peaks. Currently, it suggests miners are still profiting well.

5 On-Chain Metrics Indicate Bitcoin Bull Run is Far from Over

Source: TheBlock

Signs of a potential market peak

Despite these bullish signals, some metrics suggest the market might be overheating. The Realized Hodl (RHODL) ratio compares the price of recently bought Bitcoin to that of Bitcoin bought one to two years ago. 

If new buyers are paying significantly more than long-term holders, it could indicate a market peak. This ratio signalled a peak in March.

The Cumulative Value-Days Destroyed (CVDD) metric also appears to have peaked. 

CVDD measures the cumulative value of Bitcoin moved from older hands to new hands relative to the market age. A sudden movement of old coins can signal a market peak.

5 On-Chain Metrics Indicate Bitcoin Bull Run is Far from Over

Source: LookIntoBitcoin

What’s next for Bitcoin’s price?

Given the current on-chain indicators, it looks like Bitcoin’s price is set to continue rising. High market dominance, favourable MVRV Z score, Puell Multiple, hodl waves, and miner revenue all suggest a bullish trend. 

Although some metrics hint at a potential market peak, the overall data indicates that Bitcoin’s price is likely to see further gains before any significant downturn.

Crypto Whales: How To Find Them And Why Do They Matter?

Crypto Whales: How To Find Them And Why Do They Matter?

In the vast and volatile ocean of the cryptocurrency market, there exists a creature of immense power and influence: the crypto whale. Much like their namesake in the natural world, crypto whales are entities or individuals who hold a colossal amount of cryptocurrency. 

They are the big players whose investments are so significant that their trading movements can cause ripples or even tidal waves across the market, influencing prices and trends in ways that affect every other participant.

What is a crypto whale?

A crypto whale is someone who owns a huge amount of cryptocurrency. It’s called a whale as it may resemble a real whale, which s a huge creature in the ocean. 

Because they have so much crypto, these crypto whales can make big moves in the market. If they decide to buy a lot of one type of cryptocurrency, the price can go up because there’s a lot of demand all at once. 

If they sell a lot, the price can drop because it looks like there’s a lot of that crypto available all of a sudden. 

Essentially, crypto whales are important because their actions can change the prices in the cryptocurrency market very quickly, influencing how much your cryptocurrency is worth.

Who exactly qualifies as a whale? 

While there’s no exact threshold, it’s generally agreed that these are holders of enough digital currency that their buy or sell orders can single-handedly move market prices. 

This might mean owning thousands of Bitcoins, millions in Ethereum, or equivalent amounts in other digital currencies.

The impact of crypto whales on the market

Many talk about the crypto whales because they can dramatically sway market prices in one direction or another.

These market movements are not just numerical changes on a screen; they can have real effects on other investors. 

For instance, a sudden price drop caused by a large sale can trigger panic selling among smaller investors, further driving down the price. 

On the other hand, a price increase might encourage more buying, creating a snowball effect that pushes the price even higher.

However, not all impacts of whale activity are negative or manipulative. Sometimes, whales can bring stability to a market by using their substantial holdings to prevent drastic price swings. For instance, they might buy up a cryptocurrency when its price drops to a certain level, providing a safety net that can reassure other investors and stabilise the market.

Luckily, crypto transactions are all recorded on the blockchain. That’s how we can all check the current crypto whales and observe in real-time any sudden massive crypto transactions. 

Of course, we can only see the wallets belonging to these whales, but we can’t tie them to a particular person. Also, we cannot know if one or more wallets belong to the same individual. Understanding how the blockchain works will offer great insight into how to interpret the data offered by this technology. 

How to identify crypto whales

Identifying the movements of crypto whales is key to understanding market dynamics, yet it requires access to specific tools and platforms designed to track and analyze vast amounts of transaction data across different blockchains. 

Blockchain explorers

These platforms allow users to view real-time transactions on their respective blockchains, including the amounts transferred and the wallet addresses involved. 

By monitoring large transactions, one can infer potential whale movements. For example, a single transaction involving thousands of Bitcoins or a similar magnitude of another cryptocurrency could signal whale activity.

crypto whale

Source: Blockchain.com

These are just some examples. Such a blockchain explorer exists for any blockchain. You can simply search for the “name of the blockchain” + “explorer” on Google and you will find the corresponding blockchain explorer. 

Crypto analytics platforms

Specialised analytics platforms offer more nuanced insights into the crypto market, including the tracking of whale movements. These services analyse blockchain data to highlight large transactions and potentially link them to known whale accounts or institutions.

  • Whale Alert (@whale_alert on X): Known for real-time alerts on large cryptocurrency transactions across various blockchains, helping to identify potential whale activities.
  • CryptoQuant: Offers a range of metrics and indicators, including exchange inflow/outflow, which can indicate potential sell/buy pressure from whales.

Social media and forums

Social media platforms and cryptocurrency forums are also rich sources of information and speculation regarding whale activities. 

Communities on Reddit (such as r/CryptoCurrency), X (former Twitter), and specialised forums often discuss large transactions and potential whale movements, providing context and interpretations that may not be immediately apparent from raw data alone.

Crypto wallets and transactions

Identifying a whale involves more than just spotting a large transaction. 

It’s about recognising patterns over time, such as repeated transactions from the same wallet address or significant amounts moving in response to market events. 

Wallets holding large amounts of cryptocurrency often belong to individuals, exchanges, or institutional investors, each influencing the market in different ways.

While the tools and platforms mentioned provide valuable insights into whale activities, interpreting this data requires a nuanced understanding of the market. Observing transaction patterns, understanding the context of large movements, and staying informed through community discussions are all crucial for those looking to navigate the crypto waters influenced by whales.

Crypto whales are important

Understanding the role of crypto whales is crucial for anyone involved in cryptocurrency. 

Their actions can serve as indicators of market trends, offering insights to savvy investors who keep an eye on whale movements. 

By recognising the signs of whale activity, investors can make more informed decisions, navigating the crypto market with a better understanding of its underlying dynamics.

Solana Vs Ethereum: Could SOL Surpass ETH In User Adoption?

Solana Vs Ethereum: Could SOL Surpass ETH In User Adoption?

Solana is showing signs of potentially surpassing Ethereum in terms of consumer decentralized applications (DApps), as noted by Solana Foundation’s former head of growth. Despite current market challenges, Solana’s unique features could lead to increased developer activity and user adoption.

Matty Taylor, co-founder of Colosseum and previously part of the Solana Foundation, shared that he believes the Solana blockchain is going to become more popular than Ethereum, especially for regular users. 

He said that Solana has been doing better than Ethereum in attracting user-friendly apps that fit with the modern web, thanks to its ability to handle transactions quickly and efficiently.

Currently, according to DappRadar, Ethereum has about 4,520 decentralized applications (Dapps), which is considerably more than the ones on Solana (240). 

But even so, Solana has kept its nickname over the years, as it is often mentioned as a potential “Ethereum-killer.” This is because Solana can process transactions faster and more efficiently than Ethereum.

The collapse of FTX and the subsequent market downturn were major challenges for Solana, but according to Matty Taylor, these events actually brought more developers to the platform, even as the value of Solana’s SOL token dropped. 

Taylor pointed out that every major blockchain network, including Bitcoin with its Mt Gox incident and the 2020 market downturn, has faced tough times. He believes that Solana has emerged from these challenges stronger and with a growing number of developers.

Despite these advancements, Ethereum still leads significantly in the crypto space. 

As of March 2024, according to DefiLlama data, the total value locked (TVL) on Ethereum is $50.5 billion, more than 11 times Solana’s TVL of $4.34 billion.

Solana Vs Ethereum: Could SOL Surpass ETH In User Adoption?

Source: DefiLlama 

Solana Vs Ethereum: Could SOL Surpass ETH In User Adoption?

Source: DefiLlama 

Additionally, Solana faced technical issues when its blockchain stopped producing blocks for over five hours on February 6, forcing a network restart by its validators. This was not the first time; Solana has experienced several notable disruptions since January 2022.

Matty Taylor explained that while network problems are usually bad for any system, blockchains trying to expand their capabilities will naturally face some challenges. He mentioned that it’s better for these issues to occur now rather than later, especially before large, critical funds like pensions begin to rely on blockchain technology. He admitted that while it’s not ideal, these challenges are part of the innovation process.

Ethereum vs Solana dApps

There is no doubt that Solana is becoming a serious competitor to the already established Ethereum blockchain. 

According to DappRadar, the top 10 Dapps are divided between Ethereum and Solana. Three of these are native to Solana, six are Ethereum-based, and one (Magic Eden NFT marketplace) supports both blockchains. 

However, it’s worth pointing out that the UAW (Unique Active Wallets) interacting with these apps seems to be increasing on the Solana-based Dapps. 

Raydium, the Solana-based DEX, has taken the lead with over 1.15 million unique addresses in the last 30 days. This is almost double that of the most popular DEX in the crypto space, Uniswap. However, the top from DappRadar counts Uniswap V3, V2 and the NFT aggregator as separate Dapps, but there’s no way of knowing if those aren’t the same addresses on both Uniswap V3 and V2. 

Solana Vs Ethereum: Could SOL Surpass ETH In User Adoption?

According to CoinMarketCap, Solana (SOL) registered a price surge of over 78% during the last month, reaching a trading price of about $185 at the end of March 2024. 

Solana Vs Ethereum: Could SOL Surpass ETH In User Adoption?

This sharp increase, together with its latest tech developments, played a pivotal role in last month’s TVL increase for its top protocols. Here’s a screenshot from DefiLlama of the top protocols on Solana, sorted by their TVL (total value locked). 

Solana Vs Ethereum: Could SOL Surpass ETH In User Adoption?

Stablecoin dominance

Stablecoins are another way to measure how relevant a blockchain really is. Investors and day traders will often use stables, such as USDT and USDC to safeguard their trading profits from the market’s volatility. 

While Ethereum still maintains its sovereignty, being responsible for over 52% of all stablecoin transactions, Solana ranks as the 4th blockchain for stablecoin trading, with a 1.86% dominance of the total market share.  

Solana Vs Ethereum: Could SOL Surpass ETH In User Adoption?

Source: DefiLlama, Total Stablecoins Market Cap Dominance

Here is a breakdown for each of the top blockchains for trading stables. 

Solana is gradually growing in volume and market capitalization, experiencing more than a 4% increase over the last week. It appears that Solana is steadily outpacing Ethereum. If this trend continues, it will not be a matter of if but rather a question of when.

Solana Vs Ethereum: Could SOL Surpass ETH In User Adoption?
What Is The Ethereum Dencun Upgrade, And Why Is It Important?

What Is The Ethereum Dencun Upgrade, And Why Is It Important?

The Ethereum Dencun upgrade, combining Deneb and Cancun updates, introduces significant changes to enhance scalability and reduce fees. This upgrade, crucial for Ethereum’s future growth, facilitates cheaper transaction storage off-chain. 

What is Ethereum Cancun-Deneb (Dencun) upgrade?

Dencun combines two updates called Deneb and Cancun into one big change for Ethereum, touching both the part of Ethereum that reaches agreements (consensus layer) and the part that handles transactions (execution layer). 

The Dencun upgrade also brings a feature called Proto-Danksharding through EIP-4844, aiming to lower the costs for layer 2 (L2) storage solutions. It introduces a new kind of temporary data storage called “blobs,” which helps in making storage cheaper for rollup providers. 

Proto-danksharding is an early step towards full danksharding. It allows layer-2 solutions on Ethereum to keep large transaction data off the main network, similar to using a temporary storage space. This helps reduce costs for users of layer-2 solutions by keeping the main Ethereum network less cluttered and reserved for crucial transactions.

These blobs stay available on the network for about 18 days, or 4096 epochs, after which they are removed. However, even after removal, the validity of the data can still be checked with certain proofs.

This is a major system update in blockchain, and it started at a specific time in Ethereum’s history, rolling out completely in 15 minutes. This update aims to cut down fees for certain transactions and enable Ethereum to handle more activity.

Deneb focuses on improving the agreement part of Ethereum, making sure everyone on the network agrees on what’s happening. 

Cancun upgrades how transactions are done, making them smoother and more efficient. 

This addition is expected to significantly lower rollup costs, control the size of the blockchain, and accommodate more users while keeping the network secure and decentralized.

This big change comes after another important update last year, which let people take their Ethereum out if they had put it into the network before.

What will happen after the Ethereum Dencun upgrade?

Lower fees from rollups

This feature started on March 13, 2024, at 1:55 PM UTC, from epoch 269568. 

Major rollup providers like Arbitrum and Optimism have announced they will start using the new blob feature right after the upgrade. 

However, the exact time when each rollup will start showing lower fees might differ because each provider needs to update their systems to use the new blob space.

Off-chain transactions to keep the network costs low

The Dencun upgrade makes Ethereum better by allowing it to handle more users and transactions without raising costs too much. It also keeps the network spread out and not controlled by just a few.

Ethereum is focusing on improving “layer 2 rollups.” These are systems that help handle more users safely.

Rollups work by doing transactions separately and then sending a summary or proof back to the main network. This process costs money, which was high before because every network user had to keep the information forever.

The Dencun upgrade introduces Proto-Danksharding, making it cheaper to store these summaries. Now, they only need to be kept for about 18 days, reducing costs. Since rollups need about 7 days to handle withdrawals, the new 18-day limit is more than enough, keeping everything secure without needing more computer storage.

Impact all Ethereum consensus and validator clients

The Proto-Danksharding update (EIP-4844) requires changes to both the systems that carry out transactions and the ones that help agree on the network’s state. 

All the main programs used by Ethereum have been updated to reflect this change. 

People running these programs need to make sure they’re using the latest version to stay connected with Ethereum after the update. 

Remember, this info can get outdated, so always look for the latest updates. Also, the software used by validators, who help keep Ethereum secure, has been updated for this new change.

Layer 2 (L2) transactions can be stored in 2 ways

Transactions on Ethereum’s Layer 2 can now be stored in two ways

  1. in new, cheaper temporary blob space or 
  2. in the older, more costly permanent smart contract calldata. 

Blob space saves money by offering short-term storage, enough for all needed security checks. The permanent calldata, though more secure for long-term, costs more.

The choice between using blob space or calldata is usually up to the rollup providers, who decide based on how much blob space is available. 

If lots of people want to use blob space, they might have to use calldata to make sure transactions go through quickly.

Even though users might technically pick which storage they prefer, rollup providers typically make this decision to keep things simpler and costs lower. For more details on how this works, you should look at the information given by the rollup providers.

Enhanced security with EIP-4788 and EIP-6780

The Dencun upgrade wasn’t mainly about security, but it did bring in some improvements to make Ethereum safer.

Part of the update, EIP-4788, helps the parts of Ethereum that check transactions and the parts that carry out transactions talk to each other better. This could make it harder for attackers to find and exploit weak spots.

Another change, EIP-6780, is about altering the way smart contracts can end themselves through the “SELFDESTRUCT” function. By tweaking how this works, it’s harder for bad actors to misuse this function, which could lead to better overall security for Ethereum smart contracts.

Lower costs on Layer-2 solutions

The Dencun update has introduced a new method for Ethereum’s Layer-2 scaling solutions that lowers the cost of transactions. 

These Layer-2 networks group many transactions together to save money before sending them to the main Ethereum network. 

The key feature of Dencun, called proto-danksharding and introduced in EIP-4844, reduces Layer-2 costs by allowing these networks to store certain transaction information outside the main blockchain.

Will the 4844 update lower the cost of gas on Layer 1 (L1)?

Not really. 

The update brings in a new way to charge for something called blob space, used mainly by rollup providers. Moving rollup data to blobs might lower fees on L1 a bit, but the main goal is to cut costs on Layer 2 (L2). Any decrease in L1 fees would be a small, indirect result.

The lessening of L1 gas costs depends on how much the rollup providers use the new blob data. But since L1 is used for lots of other things too, its costs might stay competitive. 

If rollups start using blob space, they will use less L1 gas, which could help reduce L1 gas prices for a while. 

However, blob space has its limits; if it gets too full, rollups will need to use the old, more expensive storage, which could make gas prices go up again for both L1 and L2.

How do you get old blob data?

Regular Ethereum nodes keep the latest network information, but they can throw away old blob data after about 18 days. Before getting rid of it, Ethereum makes sure everyone who might need it has a chance to:

  • Grab and save the data if they want.
  • Finish any dispute periods for rollups.
  • Complete the transactions for rollups.

People might want old blob data for different reasons, and there are a few ways to get it:

  • The Graph uses a network of node operators paid in cryptocurrency to keep this data.
  • BitTorrent lets volunteers store and share the data.
  • Ethereum’s portal network is working to let people access all Ethereum data through a network similar to BitTorrent.
  • Individuals can also keep their own copies of any data they find important.
  • Rollup services might keep the data to make their services better.
  • Block explorers use special nodes to collect and keep all this information, making it easy to look up past data on the web.

When getting old data back, you just need one reliable source to check it against the current network state.

How does this upgrade fit into the larger plan for Ethereum?

Proto-Danksharding is a preparatory step towards fully adopting Danksharding. 

Danksharding aims to spread out the storage of transaction data among different network participants, so no single one has to store everything. 

This method will allow more data to be included in each block, helping Ethereum grow to support more users and transactions.

Such growth is key for Ethereum to serve billions of people affordably and run more complex applications while keeping the network spread out and not controlled by just a few. 

Without these updates, the equipment needed to run the network would become too costly, possibly leaving only a few large players in charge, which would conflict with Ethereum’s goal of being decentralized.

Latin America Embraces Blockchain for Digital IDs

Latin America Embraces Blockchain for Digital IDs

Buenos Aires plans to issue blockchain-based identity documents, including birth and marriage certificates, while Brazil aims to make its new blockchain-powered national ID program available across the country. Both initiatives signify a major leap in government services and personal data security.

More than 214 million people in Brazil are about to start using blockchain technology for their digital IDs, according to a recent announcement by the government. The states of Rio de Janeiro, Goiás, and Paraná will be the first to start rolling out these blockchain-based identification documents. 

They’re using a special, secure system created by Serpro, Brazil’s national data service. The plan is to have this technology available across the entire country by November 6, 2023.

Alexandre Amorim, the head of Serpro, explained that blockchain was chosen for this project because it’s a secure and decentralised way to manage digital IDs.

Blockchain technology is key in making personal data more secure and in reducing fraud, creating a safer digital environment for people in Brazil. 

The use of the b-Cadastros blockchain platform improves the safety and trustworthiness of the National Identity Card project. 

According to the government, this project is important for tackling organised crime and encouraging different parts of the government to collaborate. It also makes it easier for people to get government services and helps simplify record-keeping.

In recent years, Brazil has been trying to standardise the way IDs are issued across its nearly 30 states. This new technology will help safely share data between the Federal Revenue Agency and other government departments, as stated in the announcement.

Another big change happening in the country is the introduction of a new digital currency by the central bank. 

The government recently shared more details about this project in August and has renamed the digital currency to “Drex.” 

Past reports suggest that the central bank aims to make it easier for businesses to get funding through a special system linked to Drex. A local developer found that the code for Drex allows a central body to either freeze money or lower account balances.

Notably, Buenos Aires in Argentina has announced a similar plan that lets people get their identity documents through a digital wallet.

Blockchain-based in Buenos Aires, Argentina

Buenos Aires, Argentina’s capital, is also taking a big step to include blockchain technology in its administrative processes. 

Starting in October, people living in the city will be able to get their identification documents through a digital wallet, as revealed in a September 28 announcement

Initially, you’ll be able to get documents like birth and marriage certificates, proof of income, and school records on this blockchain system. The plan also includes adding health records and payment information down the line. 

The city aims to have a detailed plan for expanding this blockchain service throughout the country by the end of 2023.

The technology backbone of this project comes from QuarkID, which is a digital identity system created by the Web3 company Extrimian. 

QuarkID wallets use zkSync Era, a special feature built on the Ethereum network that helps it run more efficiently. This feature uses something called zero-knowledge rollups, which lets one person show another that something is true without having to share any detailed information about what that ‘something’ is.

“This marks a huge leap forward in making government services in Latin America safer and more efficient,” said Guillermo Villanueva, the CEO of Extrimian.

The information in these digital wallets will be controlled by the individual, meaning people can decide how and when to share their credentials, whether it’s with the government, businesses, or other people. zkSync Era will serve as the foundation for QuarkID, making sure everyone’s credentials are accurate and secure.

Diego Fernandez, who leads innovation for Buenos Aires, added, “This makes Buenos Aires the first city in Latin America, and among the first globally, to adopt and champion this new technology. We’re setting an example for how other countries in the region can use blockchain technology for the good of their citizens.”

Officials in Argentina are looking into another digital ID project called Worldcoin. In August, they revealed that they’re examining potential privacy issues tied to how Worldcoin gathers, stores, and uses people’s information. The project is also facing questions in Europe and Africa since it went global in July. Created by Sam Altman, who is also a co-founder of OpenAI, Worldcoin uses eye scans to confirm the identity of its users.

Crypto Miners Turn to Renewable Energy 

Crypto Miners Turn to Renewable Energy 

As environmental concerns and costs mount, the future of crypto mining is looking increasingly green. Industry leaders are exploring alternative energy solutions for more sustainable and cost-effective operations.

In 2021, when cryptocurrency prices were soaring, big mining companies borrowed a lot of money to buy the gear and set up the systems they needed to mine crypto. But then major crypto platforms like FTX and Celsius went under, leaving many of these companies broke and struggling.

With crypto prices down and competition in Bitcoin mining fiercer than ever, people are questioning whether these mining operations can bounce back from their losses. One thing’s for sure, these companies are now looking at using greener energy options to save money, make some profit, and also be a bit kinder to the planet.

How do you keep crypto mining prices low?

According to Swan Bitcoin, a company focused on Bitcoin financial services, it generally costs around $26,000 to mine one Bitcoin

However, companies that use renewable energy are finding it much cheaper, with costs ranging between $5,000 and $15,000 per Bitcoin.

A spokesperson from Riot Blockchain, a U.S.-based Bitcoin mining company, explained that thanks to wind and solar energy in Texas, their costs are among the lowest in the crypto mining business. To be exact, it costs Riot $8,389 to mine a single Bitcoin.

Kent Halliburton from Sazmining, a company that hosts Bitcoin mining operations, pointed out that the biggest cost in mining is electricity. He said that miners naturally want to find the cheapest power available, and renewable energy often fits the bill because it sometimes produces excess electricity. He also mentioned that data from the Bitcoin Mining Council indicates that the Bitcoin network is becoming increasingly sustainable, with 59% of mining now carbon-free and growing each year.

Phil Harvey, the CEO of Sabre56, a company providing infrastructure for crypto mining, said that they’re helping several mining companies set up operations at their facilities in Wyoming and Ohio. This move towards renewable energy appears to be a growing trend among miners who are thinking about their long-term success.

Crypto miners have ingenious designs to keep running costs low

Phil Harvey from Sabre56 said their mining center in Gillette, Wyoming, known as “Bonepile,” has around 2,200 mining machines running on a mix of energy sources. Nearly 29% of this energy is renewable, coming from wind, recovered energy, and hydropower. The machines they use are a mix of MicroBT Whatsminer M50s and Bitmain Antminer S19s. The Bonepile site uses a special design to keep the machines cool: they force air into the facility, which helps prevent the machines from overheating and allows for hot air to naturally exit.

This design is different from the usual methods used in the mining industry, where typically additional systems are used to suck hot air out, but there’s no special system to bring fresh air in.

On the other hand, OceanBit is taking a unique approach to renewable energy for mining. Michael Bennett, the co-founder, explained that they are incorporating Bitcoin mining into their ocean thermal energy power plants. This allows them to adjust to fluctuating energy demands, deliver power more quickly to offshore projects, and also make extra money from unused energy.

Ocean thermal energy, according to Bennett, is a massive and largely untapped renewable energy source. It uses the temperature difference in ocean water to generate electricity, similar to how hydro and geothermal energy work. Bennett thinks that Bitcoin could be the key to making this type of energy more widely used because it helps solve some of the commercial challenges associated with ocean thermal energy.

Diagram of OceanBit’s thermodynamic cycle. Source: OceanBit

Nathaniel Harmon, who co-founded OceanBit with Michael Bennett, explained how their system is a win-win. The ocean thermal energy conversion (OTEC) process produces cold water as a byproduct, which is perfect for cooling the specialized computers used in Bitcoin mining, known as ASICs. On the flip side, these ASICs produce low-level heat, which can be recycled back into the OTEC process. This creates a cycle that makes both operations more efficient and cost-effective.

Bennett also mentioned that OceanBit is aiming to reveal its research and development power plant in Hawaii by 2024.

Alternative energy sources

Stronghold Digital Mining, a crypto mining company in Pennsylvania, is taking a different approach by using waste coal to power its mining activities

This waste of coal, which is left over from the coal mining process and mixed with various impurities, has been a pollution issue in Pennsylvania for years. Greg Beard, the CEO of Stronghold, said they’re working with local environmental agencies to clean up these waste coal piles and use them for energy.

Beard pointed out that the waste coal has been a major source of water pollution and has also caught fire spontaneously over the years, releasing toxic fumes. By converting this waste into energy, Stronghold either powers its own Bitcoin mining or feeds electricity back into the local grid. Beard argues that this makes their operation more efficient than other miners who are just looking for cheap power.

However, this method isn’t without its critics. Using waste coal still means burning hydrocarbons, and some groups claim that these kinds of plants actually pollute more than new coal plants. Stronghold also faced backlash when it planned to burn tire-derived fuel at one of its plants. Russell Zerbo, an activist with the Clean Air Council, said that the plant should be reclassified as a solid waste incinerator, which would subject it to stricter air pollution monitoring. So, while Stronghold’s method does help clean up waste coal, it also raises environmental questions.

The challenges of using renewable energy 

While it’s good news that crypto mining companies are moving towards alternative energy, there are hurdles that could slow down this transition

Kent Halliburton mentioned that people often misunderstand the benefits that Bitcoin mining can bring to local communities, like creating jobs and making use of excess or wasted electricity. Electricity is hard and expensive to store, so if it’s not used or stored right away, it goes to waste.

Phil Harvey pointed out another challenge related to the location of their mining facility in Gillette, Wyoming. Due to the high altitude, the air is thinner, making it harder for their machines to pull in enough air for cooling.

Additionally, the issue of thermal pollution exists, where hot air from mining machines is released into the atmosphere. To counter this, some companies are getting creative. For example, Genesis Digital Assets uses the hot air generated by its mining machines to grow vegetables in colder climates.

So, while the move towards renewable energy in crypto mining is promising, there are still a variety of challenges that need to be addressed.

It looks like renewable energy will play a key role in the future of crypto mining. Bitmain, a top company in crypto mining gear, is now focusing on water-cooling technologies, as the demand for such eco-friendly options will keep rising.

Nearly 25% of all Bitcoin miners are already using water-powered setups. Wind and nuclear energy come in second and third as the most popular sources of power for these miners.