The Hardware/Software Landscape
On June 4, 2022, Ethereum hashrate captured another milestone by reaching an all-time high of 132 petahash per second (PH/s) at block height 14,902,285. This remarkable achievement represents a 3.93% increase from the previous peak of 127 PH/s recorded just two weeks earlier on May 30. The network has been on an upward trajectory throughout 2022, with the hashrate breaking multiple records as The Merge approaches.
The Ethereum network is driven by approximately 78 mining pools, with the top five capturing only 0.745% of the global hashrate. This distributed contrast with Bitcoin’s more concentrated mining landscape, where the top five pools control over 71% of total hashpower. Ethermine leads Ethereum’s mining ecosystem with 296.69 TH/s, followed by F2pool at 151.46 TH/s, with Poolin, Hiveon, and 2miners rounding out the top five.
Hashrate & Difficulty
While Ethereum celebrated new highs, the broader crypto mining landscape faced significant headwinds. Bitcoin’s hashprice remained below $0.13/TH/day, with the satoshis per TH/day metric holding steady at 425 sats/TH/day. These metrics underscore the challenging economic conditions facing miners, who must contend with declining profitability despite maintaining or expanding their hashpower.
Bitcoin’s hashprice trend remains closely tied to the cryptocurrency’s price action and network difficulty adjustments. As the industry approaches what some analysts predict could be a difficulty drop in early June 2022, miners hope for improved economic conditions. The anticipated difficulty reduction could potentially boost hashprice if BTC prices remain stable or increase.
Profitability Metrics
The mining profitability crisis has prompted strategic pivots among publicly traded mining companies. HIVE Blockchain reported impressive May 2022 production figures, including 273.4 BTC and 2,694 ETH, while maintaining a Bitcoin HODL balance of 3,186 BTC. The company demonstrated operational resilience with Bitcoin mining capacity increasing from 2.15 EH/s at the beginning of May to 2.18 EH/s by month-end.
However, not all miners have fared as well. Several major publicly traded mining companies disclosed significant operational changes in their June production updates. Core Scientific slashed its 2022 hashrate projection from approximately 40 EH/s to around 30 EH/s by year-end. Similarly, Riot Platforms reduced its estimate from 12.8 EH/s to 12.6 EH/s. These cuts reflect the economic pressures facing the industry.
Environmental Impact
The environmental considerations surrounding cryptocurrency mining continue to evolve, with regulatory responses shaping the industry’s trajectory. The New York State Senate passed a two-year moratorium on cryptocurrency mining operations on June 3, 2022, with Governor Kathy Hochul expected to sign the bill into law. This regulatory move represents one of the most significant limitations on proof-of-work mining operations in the United States.
The regulatory landscape varies significantly by jurisdiction, with some regions embracing crypto mining while others impose restrictions. Mining companies are increasingly focusing on renewable energy sources and efficient operational practices to address environmental concerns and improve their market position.
Strategic Outlook
The crypto mining industry is undergoing a critical transformation as miners adapt to challenging market conditions and prepare for Ethereum’s transition to proof-of-stake. With The Merge approaching, Ethereum’s 78 mining pools will need to migrate to alternative networks like Ethereum Classic, Ubiq, Musicoin, Callisto, or QuarkChain.
Miners are demonstrating strategic flexibility through operational adjustments and portfolio diversification. While some companies are reducing their hashrate targets and selling BTC holdings to shore up finances, others like HIVE continue expanding operations. The next several months will likely see continued consolidation in the mining sector as the industry matures and adapts to changing market dynamics.
Disclaimer
The information presented in this article is for educational purposes only and should not be considered financial advice. Cryptocurrency mining involves significant risks, including market volatility, regulatory changes, and technological uncertainties. Readers should conduct their own research and consult with financial professionals before making any investment decisions. The author does not endorse any specific mining company or investment strategy.
132 PH/s two months before the merge. every one of those hashrate records was a GPU miner who got rektd when POS hit
78 mining pools with healthy distribution was the real achievement. ETH PoW was genuinely more decentralized than BTC mining and nobody talks about that
Aleksi K. the distribution argument is valid but pow burning electricity for security that pos achieves with validators is hard to defend long term
ETH PoW distribution was genuinely healthier. 78 pools vs BTC where 3 entities control over 50%. the merge tradeoff was decentralization for efficiency
Aleksi K. ETH PoW was more decentralized in mining but the energy consumption was unsustainable long term. the merge was the right call even if distribution suffered
Aleksi K. 78 pools vs BTC where 3 entities control half the hashpower. ETH PoW was genuinely more decentralized and the merge traded that for efficiency
bought 30 GPUs in early 2022 thinking the merge was months away. ended up mining for 4 more months then sold everything at a loss. the transition was brutal for small miners
selling 30 GPUs at a loss sounds rough. the merge was a bloodbath for small miners who bet wrong on timing
Nina J. I sold 50 GPUs and lost about $8k total. the worst part was knowing the merge was coming for 2 years but keeping the hopium alive
ethermine at 296 TH/s sounds dominant until you realize it was only 25% of total hashrate. try finding that kind of distribution in BTC mining today
ethermine at 296 TH/s being only 25 percent. try finding that distribution in BTC mining where Foundry and AntPool alone control over 50 percent
ethermine at 296 TH/s controlling a fraction of total hashrate. the distribution was actually healthy compared to BTC mining pools
healthy distribution but it also meant no single pool could push through protocol changes. part of why the merge took so long to execute
132 PH/s and every single one of those rigs became e-waste 4 months later. the merge was the most violent hardware devaluation in crypto history
rig_tears_ e-waste is generous. most GPUs went to scalpers on ebay at 40% of retail. the gpu market still hasnt fully recovered from the post-merge flood
rig_count_ most GPUs went to AI labs and data centers, not scalpers. the same RTX 3090s that mined ETH at 132 PH/s are now running inference workloads for a third of what mining paid
rig_count_ calling the post-merge GPUs e-waste is generous. most went to scalpers at 40% retail. the GPU market still hasnt recovered from the flood
132 PH/s at block 14902285 and the next difficulty adjustment pushed it higher. miners were sprinting toward a cliff they could see coming in september. pure irrational optimisation
132 PH/s at the peak. all that hashrate gone in september 2022 when the merge hit. one of the biggest hardware transitions in tech history and barely anyone noticed outside crypto
chainhist_ billions in hardware becoming worthless overnight. the media barely covered it because ETH price didnt crash. real people lost their livelihoods
billions in GPUs bricked overnight and ETH maxis were popping champagne. real miners lost their livelihoods and got called environmental villains for being upset
fork_the_merge_ billions in hardware bricked overnight and ETH holders celebrated. miners built the network for 7 years and got discarded the moment pos was cheaper
chainhist_ 132 PH/s and then 4 months later it all went to zero. the fastest decommissioning of industrial hardware in history
ethermine at 296 TH/s being only 25% of total hashrate. try finding that kind of pool distribution in BTC mining where two pools control the majority
132 PH/s and then the merge wiped it all out overnight. all that hardware became paperweights in months