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In 2023, the global Bitcoin mining industry gradually recovered from the “encrypted winter” valley in 2022.Various economic indicators have shown positive changes: Bitcoin prices have risen by 154%, and listed mining companies ‘stock index rose 246%, and online transaction expenses (have been basically in a dormant state since mid -2021) have once again become an important part of miners’ income againEssenceIn addition, the cost of energy, hosting and hardware -related costs has decreased to different degrees.
However, the Canadian Bitcoin mining situation is slightly chaotic.The government put pressure on 2022 and implemented some policies that clearly target and discriminate against the industry. These policies still exist in 2023.In this way, the entire industry is passively in a defensive posture (except Alberta Province).Because of this, the main participants in the industry began to move their sights overseas and seek more favorable opportunities.In this regard, it is expected that Canada’s share in Bitcoin’s global network computing power will drop from 7%-8%at the end of 2022 to 4%-5%, which is as high as 13%compared to 2021.
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Figure 1: Canadian bitcoin computing power accounts for global share
The economic improvement of 2023 and the “Black Cloud” shrouded in 2024
After 2022, the global Bitcoin mining industry finally turned around in 2023.The figure below shows that the price of Bitcoin rose by 154%, almost flattened the annual decline of 2022.
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Figure 2: Bitcoin price and mining difficulty trend chart
The real surprise comes from the recovery of the Bitcoin network transaction cost.Due to the development of order numbers and inscriptions, the benefits of miners’ transaction costs have been greatly improved.Data show that in 2023, the proportion of transaction expenses accounted for 7.6%, while in 2022, it was only 1.5%.
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Figure 3: The transaction fee is proportioned block reward change map
As a comprehensive measurement of the computing power income of Bitcoin miners, the computing power price rose from 59 US dollars/pH/day to 101 US dollars/pH/day, with a range of 70%.fluctuation.The average computing power in 2023 is $ 75/pH/day.
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Figure 4: A list of changes in computing power prices under the US dollar standard
Although it is relatively good fortune in 2023, the sky in 2024 does not seem to be so clear. A “black cloud” is floating in the air -Bitcoin is halved.This is an incident that occurs once every four years. The direct impact is to minimize the revenue of the block subsidy, and the second -order impact is full of uncertainty and controversy. Whether it is the price, network difficulty or transaction cost of Bitcoin.Some people think that the reduction of the incident will increase the price; while others point out that the difficulty of the network will be reduced due to the decline in computing power (due to some low -profit miners’ shutdown business).If the transaction cost can continue at a high level (as in the previous minus incident), then this can also offset the income loss caused by the semi -block subsidy.
However, the main impact of halving is certain.That is, Bitcoin miners will suffer major negative income shocks in the short term.It is currently expected to be halved around April 21, 2024.
Government supervision continues to endanger the mining industry, and the development of Canada is blocked
In 2022, a truck driver protesting the incident, coupled with the bottom of the encryption winter, Canadian mining companies were specially targeted and were supervised by extremely unfair industry policy.In essence, the decision of policies of governments at all levels is wrong. They distinguish the mining machines separated from other types of computers and collect specific taxes, electricity bills, and interconnected regulations.Therefore, in 2023, the Canadian mining industry changed its full defensive position and began to work to establish relevant institutions that advocate the mining industry that advocated the mining industry.
Unfortunately, for the Canadian economy, a bad public policy has caused losses in employment, investment and tax revenue of the country.At the national level, the Canadian government showed “superb” skills in creating uncertainty, which caused damage to employment and investment in the process.In February 2022, the Ministry of Finance proposed a “clarification” amendment without notifying the mining industry in advance, announcing that digital asset mining did not belong to “business activities” in Canada.The proposal will prevent all digital asset mining companies from obtaining the input sales tax for all other export companies.This unprecedented proposal will generate 5%-15%of the hidden tax in the Canadian Bitcoin mining costs and cause irreparable harm to Canadian companies competing in the global competitive market.
Fortunately, the corresponding solutions were released under the efforts of new digital asset business committees and HUT8, Hive, Bitfarms, Iris Energy, ARGO, and DMG.Although the proposal became a law, the legislators were amended. After the amendment, the miner may have the right to obtain the input sales tax exemption, provided that the Canadian tax bureau confirmed that they were similar to the conventional data center sales service in the case review service in the case.The method of selling computing power to overseas mining pools should be applied to almost all industry participants in Canada.Because hundreds of millions of dollars of tax credits, employment, and investment are unreasonable, the industry is still waiting for the feedback from the Canadian tax bureau and the decision of these issues.Update is expected to be released in early 2024.
In British Columbia Province, Mannitba Province, Quebec, Newburik, and Newfoundland and Labrado, the new interconnection ban in 2022 is still valid.These areas have the cleanest, cheapest and richest power resources in the world, and attract investment from the global mining industry.However, these provinces unexpectedly choose to close the door of this business, instead of using this opportunity to make necessary work to simplify the application for evaluation and improve the flexibility of the power grid system.All provinces have expressed their concerns that the power consumption has reached its peak, but it has ignored (or not understand) the inherent flexibility of the mining industry in energy use.But regardless of energy use, these ban are not used in any other type of computing industry.
In British Columbia Province, ConiffX Timber sought to invest in the mining industry and took legal operations on the province’s ban.In a publicly released white paper, ConiffX outlined the operation of the cabinet in the province that violated the law, interfered with the regulatory system, and actually violated the government’s own economic, carbon emission reduction and reconciliation goals.
In this challenging environment, Alberta has become obvious alien.The province’s election officials recognize the benefits of the digital asset mining industry, especially in creating high -tech employment opportunities (especially for rural and remote areas). In addition, the continuity of environmental and energy systems is also very potential.They are actively trying to invest and encourage economic development.In July, Prime Minister Danielle Smith and Minister Dale Nally participated in the Bitcoin mining exchange meeting of the StampeDe Canadian Blockchain Alliance, and Minister Nate Glubish described the benefits of mining on “Bitcoin Rodeo”.Minister Dale Nally participated in the second annual Texas Trade Exchange Conference of the Canadian Blockchain Alliance.
In Ontario, the Ministry of Energy seems to have abandoned the plan to exclude cryptocurrency excavators from participating in ICI in 2022.ICI is an electric energy -saving plan that allows participants to reduce power consumption demand within five peak power hours, thereby reducing its global adjustment costs.
Canadian miners are full of toughness and open up new markets
Poor policy management cannot prevent Canadian companies from innovating and entering a new market.
Perhaps the most notable thing is that HUT8 completed the largest M & A transaction in the history of the industry in November, and merged with US Bitcoin Corp.The merged company New Hut will be located in the United States and will become one of the largest independent mining and high -performance computing facilities in North America with a total power generation of about 825 MW.
Other mining companies focusing on clean energy, such as Hive and Bitfarms, have expanded their business outside Canada.Bitfarms obtained a permission to use 100 MW mining facilities in Argentina, and obtained a hydropower contract of up to 150 MW in Paraguay, and Hive completed the acquisition of a Swedish hydropower data center at the end of the year.
In terms of hardware, we saw some noteworthy cooperation in 2023.After several months of planning, engineering development, implementation of factory processes, on -site testing and global collaboration, HIVE deployed the BUzzminer provided by Intel’s BlockScale ASIC in January.Later this year, EPIC Blockchain, headquartered in Toronto, announced that he cooperated with Chain Reaction to produce the next -generation mining system for EPIC for Bitcoin mining.
Mining companies entered a new field of revenue growth in 2023.DMG has expanded its business through the field of inscriptions and preface and became the leader of the market.HUT8 signed an agreement with Interior Health in southern British Columbia Province to provide a safe lease service for it, showing its expansion outside the field of Bitcoin mining.At the same time, Iris Energy began to enter the artificial intelligence market, showing its promise to expand its products and expand its high -performance computing data center strategy.
Blocklab introduced an innovative system. Since the pilot began in 2022, it provides a environmental protection and low -cost heating solution for greenhouse operations by using the excess calories produced during Bitcoin mining.In addition, container manufacturers like UPSTREAM Data, CryptoThersm, Bit-Ram, and Intelliflex continue to maintain their innovative air-cooled and water-cooled system leadership in North America.
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Figure 5: 2023 Canadian Bitcoin mining industry
In 2024, Bitcoin miners must meet the challenges and seek opportunities
Although the rebound of Bitcoin prices and transaction costs provides miners with urgent relief, the upcoming halving incident will focus the industry’s attention to the final profit and loss.Although Bitcoin price, network difficulty, and the direction of transaction costs are still uncertain, the decrease of block rewards is certain, which will be a major negative income impact.In order to survive, the company needs to reduce costs, improve efficiency and protect profits.
In terms of policy, except Alberta Province, the possibility of improvement in other regions is not great.Unfortunately, the Federal Liberal Party does not think that the digital asset industry is an economic opportunity, but regards it as an opportunity to attack its opponent party.The rebound of Bitcoin prices may change the election calculation, but according to polls, Justin Trudeau and the Liberal Party will continue to attack Pierre Poilievre and the Conservative Party’s support for the digital asset industry.At the provincial level, bureaucratic inertia will make the overturning ban in 2024 unlikely.If the provincial government and power grid operators know the benefits of the industry, they will still need a lot of time and energy.
Nevertheless, we believe that establishing a serious, long -term and coordinated advocate agency in Canada is a career worth investing.In the final analysis, rely on rich, low cost and sustainable energy; highly skilled labor; cold climate; industrial infrastructure (especially in rural areas); and a relatively stable and secure political environment, Canada is naturally naturalPositioned as leaders of the cryptocurrency mining industry and other power -intensive computing industries.
If you want to say whether public opinion investigations show any signs, it should be the coming of political change.In order to make good use of this opportunity, the mining industry should continue to show its value. Miners should create more employment opportunities, including hardware manufacturers, infrastructure providers and software engineers.They will bring investment to local communities, especially in rural or remote areas that have not been used in their limited opportunities and industry infrastructure.In addition, the miners make full use of the burning or discharged abandoned natural gas, support the stability of the grid through demand, and achieve the construction of new renewable energy power generation assets through demand, which undoubtedly improves the efficiency and sustainability of the environment and energy system.Perhaps the most important thing is that they transport Canada’s trapped energy to the international market without requiring physical transmission lines or pipeline infrastructure, because the computing power is sold through the Internet.
After 2024 and after, whether Canada can succeed in the mining of cryptocurrencies, it will depend on whether the industry can achieve income by reducing costs, improving efficiency, and continuing to continue to educate the public and policy makers.The benefits of currency mining are tried to accept.
