Canadian crypto mining outfit Hut 8 has completed the installation of its new farm in Medicine Hat, Alberta. The launch of its new farm expands its operational power to 487.5 petahashes per second (“PH/s”) once fully operational. This key new installation helps to diversify the Bitcoin network hash rate, as Bitmain are slowly edging closer to controlling 51% of the network hash rate. One group – or pool – controlling 51% of the network hash rate is seen as a bad thing in the crypto world and can potentially have devastating consequences.
Size Does Matter
Hut 8 is different to other pools and companies like Bitmain for one reason – it’s publicly traded. Anyone can own a part of the mining company, and given the new increase in hash rate, this might bode well for investors. During the IPO and listing, its shares were valued at $4.70, but have since fallen to $3.05. This could be due to the negative sentiment towards this industry and the increased electricity prices Canadian crypto mining firms are paying. In New York crypto miners are paying virtually nothing for electricity, whereas the Canadian authorities are charging miners almost double the price of regular businesses.
Helping to Restore Balance
Recently, Bitmain has been making headlines as it is constantly creeping closer to controlling 51% of the Bitcoin network hash rate. It has fallen back a bit since its all-time high of 43.9%, but it’s still dangerously close to the line. With the introduction of mega mining farms like Hut 8, it helps to dilute the network hash rate and restore a form of decentralization to the mining process. With the incredible 487.5 PH/s from Hut 8, it should help to reign in Bitmain slightly.
A Better Mining Protocol for All
A Bitcoin Core developer is working on creating a totally decentralized mining protocol called BetterHash. It essentially helps to prevent mining pools from taking too much control of the mining process and gives the power back to individual miners, increasing their chance of winning the reward for mining the next Bitcoin block.
While Hut 8’s new hash rate will help to offset centralization in the mining world, it is still not enough to put a considerable dent into Bitmain’s dominance. There is some hope though, if investors continue to see profits and more innovation from the company, they will likely pump more money into it, meaning it can expand its operations and increase this enormous hash rate even further.