Over the year, the share of publicly listed mining companies in Bitcoin’s hashrate rose by 295% to 58 EH/s. In aggregate, this accounts for 25%, according to a report by Hashrate Index analyst Jaran Mellerud.
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— Jaran Mellerud (@JMellerud) October 24, 2022
In October 2021, private miners accounted for 90% of the network’s computational power.
During last year’s bullish market, many companies in the industry went public, gaining access to capital to expand operations. The firms invested in mining facilities with deliveries through the current year and into early 2023.
This drove up their share in the hashrate. Private companies, lacking such financial firepower, increased it by only 58% over the year, Mellerud noted.
The sharp growth in compute power among private miners began in January 2022 after the listing on the exchange of the industry’s largest company Core Scientific.
As of October, the company’s share of the network’s total hashrate reached nearly 5% — 13 EH/s. Core Scientific plans to raise capacity to 17 EH/s by the end of 2022.
Marathon Digital and Riot Blockchain, ranking second and third, also plan substantial capacity expansions by mid-2023: to 13.5 EH/s and 23 EH/s respectively.
According to Mellerud, by this timeframe the share of public miners in Bitcoin’s hashrate could reach 40%. The continued delivery of previously ordered equipment will drive further growth. Some companies already have thousands of devices in warehouses awaiting connection, the analyst noted.
However, in his view, the growth rate will slow. This is due to the financial difficulties public miners face and possible bankruptcies. Mellerud also noted that most companies in the sector (apart from Bitfarms) operate and expand in North America. Tariffs in the region, as in Europe, have suffered more than others from rising energy prices.
Private miners have greater flexibility in seeking a cheap power source in South America, Asia, and even Africa, the analyst says. This is their advantage, he added.
“Therefore, I believe that in the long run we will never see public miners controlling more than half of Bitcoin’s network,” concluded Mellerud.
Earlier in September, the sector faced its first major bankruptcy — Compute North, a private mining company and hosting provider, filed for bankruptcy.
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