Bitcoin’s hashrate has risen to a new all time high, surpassing 144 petahashes per second with the uptrend continuing while the nature of bitcoin mining is also changing.
It used to be just hobbyist who were replaced by giant mining farms, but now states are getting involved, with Iran seemingly considering bitcoin mining as a strategic asset while Kazakhstan sees it as providing economic opportunities.
This changing nature of bitcoin mining may also affect its price from an investment perspective because industrial mining farms were and are pure businesses that see bitcoin just as the product through which to make profits.
They sell it instead of actually using it, unlike strategic mining which values it more for its capabilities of facilitating international trade.
As such, strategic mining may have less downwards pressure on price as the coins are not quite sold, but practically exchanged for goods or sometime for services.
Ethereum on the other hand has not quite gained such strategic importance yet, but something else is developing there which can have considerable implications.
Ethereum has risen recently to 260 terahashes a second with it being not far off from all time high, but arguably its hashrate should be much higher.
That’s especially the case as it costs about $150 to mine one eth, with price currently nearing $400 and more importantly, mining fees are adding another $400 or more especially during this summer.
You’d expect therefore ethereum’s hashrate to have far surpassed all time high, but it hasn’t and the reason may be there just aren’t any GPUs available.
Unlike bitcoin Asics which were cottage produced initially to then become specialist professional industrial manufacturers, GPUs are dominated by two legacy manufacturers: AMD and Nvidia.
Diseconomies of scale means AMD and Nvidia can’t quite respond to market forces as quickly as small, agile, and hungry new producers.
Thus however much people or businesses may want to mine eth, there just aren’t enough GPUs to satisfy demand especially in China where trade policies may create artificial shortages.
Meaning it may well be ethereum has discovered some market inefficiencies in GPU manufacturing which can then have repercussions for the semiconductors market where there’s an intense race between Europe, America and China.
Semiconductor chips being the base of all things tech, the faster they are, the faster becomes everything, and thus the greater the economic gains with asics manufacturing giving China some advantages due to these manufacturers being new, and thus free from decades or even century old bagages.
While in America Intel keeps delaying 7nm chips, with such delays potentially a sign of not enough competition in this specialized field, something that is now becoming visible in ethereum’s hashrate as where pure economics is concerned, its hashrate should be far higher and way more responsive to price actions.