AI Data Centers Could Benefit Bitcoin Mining Industry

According to CoinDesk, the emergence of artificial intelligence (AI) data centers is poised to positively influence the bitcoin mining sector, even for those miners not directly involved with AI. The competition between AI data centers and bitcoin miners for affordable electricity could establish a baseline for hashprice, a key metric for miners' revenue. Spencer Marr, president of bitcoin mining firm Sangha Renewables, highlighted that every potential mining investment now considers whether a site is better suited for AI or mining. When AI or other high-performance computing is chosen, it prevents hashrate from increasing and hashprice from being adversely affected. Hashrate refers to the total computational power supporting a Proof-of-Work blockchain like Bitcoin, while hashprice indicates the bitcoin earnings miners can expect from their computational efforts. Currently, bitcoin’s hashrate stands at 770 exahash per second (EH/s), with a hashprice of $61.12 per petahash per day, according to Hashrate Index data. Hashprice has been declining as mining competition intensifies, contrasting with 2017 levels where it often exceeded $1,000. Establishing a hashprice floor would ensure that computing power retains a minimum value, regardless of conditions. Marr noted that miners are being edged out by other computing forms in the quest for cheap electricity. This dynamic could lead bitcoin miners to relocate to regions where AI data centers are less prevalent, as suggested by Jaran Mellerud, co-founder of Hashlabs Mining. Mellerud believes that the competition for power from AI facilities will not significantly impact hashprice, as the Bitcoin mining network is self-correcting. A reduced hashrate in one country could increase profitability elsewhere, allowing miners to expand. He predicts that by 2030, the U.S. will account for less than 20% of the hashrate due to AI competition, with growth shifting to Africa and Southeast Asia. Marr acknowledged these points but emphasized the limited availability of extremely cheap electricity. AI data centers are more complex to operate than bitcoin mines, requiring constant uptime and higher operational costs. He concluded that while competition for electricity might slow hashrate growth, it may not halt it entirely.