According to BlocksBridge, despite the industry shifting towards artificial intelligence, the difficulty of Bitcoin mining is still increasing, and smaller operators may be acquiring equipment that larger competitors have abandoned.
The computing power of the Bitcoin network has risen to a seven-month high, despite several large listed mining companies shifting their production capacity to artificial intelligence. This indicates that other operators are making up for the lost computing power and intensifying competition among the remaining miners in the network.
According to the latest Miner Weekly newsletter from BlocksBridge Consulting, the average computing power of Bitcoin has rebounded to over 1 zettahash per second ( ZH /s), which is equivalent to 1,000 exahashes ( EH /s) per second, representing the highest level since March 3rd.
Computing power measures the computational capability required to ensure the security of the Bitcoin network. The rebound in computing power indicates that, despite the industry's ongoing transition towards the AI workload, miners remaining on the network have hardly had any respite from competition.
According to BlocksBridge, the difficulty of Bitcoin mining increased by 5.92% on October 16, and it is expected that the next adjustment will see another increase of 5.16%. If this prediction comes true, the mining difficulty will have risen by approximately 11.4% over two consecutive adjustments.
BlocksBridge wrote: 'This is far from the respite that remaining miners might have expected to gain from the migration from AI.' The institution made this statement while discussing the increasingly fierce competition faced by operators continuing to mine Bitcoin.
The transition to AI has resulted in a significant portion of mining capacity being taken out of the network. BlocksBridge previously reported that the actual computing power of listed miners had decreased by 23%, while their disclosed AI and high-performance computing revenues increased by 52% month-on-month. The institution estimates that the capacity that was transferred corresponds to approximately $1.5 billion worth of mining hardware.
Some of the lost production capacity may be returning to the network through smaller and medium-sized miners purchasing equipment from large operators. BlocksBridge mentioned Sazmining, a company that promotes second-hand Antminer S21 XP mining machines, allowing buyers to deploy these devices through its hosting facilities in Paraguay and Texas.
For miners who can obtain cheaper electricity, purchasing second-hand machines may be more cost-effective than investing in new equipment. This also means that the hardware that has been modified and displaced by AI may continue to be used for Bitcoin mining elsewhere.
However, it is still unclear at present how many of the devices being sold actually come from listed miners, and how many have already returned to the network.
As some industry observers see the increase in computing power as an "indirect bullish signal" for Bitcoin, suggesting that it reflects ongoing investment by institutions in listed mining companies, this interpretation has also arisen with the rebound in computing power.
CryptoQuant Founder and CEO Ki Young Ju recently stated on X: “Higher computing power means stronger security, as well as better fundamentals as a tool for value storage.”
