Hashrate Collapse, BIP-110 Chain Split & Banks Will Mine Bitcoin | Bob Burnett

— Bitcoin's hash rate has declined for nearly a year—the first such decline in 16 years—and is expected to continue falling through the next halving, driven by public miners pivoting to AI and data centers, equipment obsolescence, and tight capital conditions.

— The "miner's trilemma" (energy, machines, capital) explains why one factor is always hard; easy capital in 2021–2023 caused overbuilding and pushed out small-to-medium miners, concentrating hash and pool power and creating centralization risks.

— Financial institutions and nation states—not energy companies—will be the next entrants to mining, mining for block space control rather than coin production; banks like BlackRock will want guaranteed transaction throughput, while countries like Iran are already solo mining for economic sovereignty.

— BIP-110 (RDTS) activates at block 961632 in mid-August, proposing a temporary 256-byte limit on arbitrary data to restore network consensus debate; a chain split is likely, forcing miners and node operators to choose between the compliant and legacy chains within hours.

— Pre-halving conditions create poor business investment sentiment; the best time to enter mining is "in the depths of despair," when equipment is cheap and capital is scarce, allowing small operators with low-cost power to build sustainable, long-term businesses.

— Barefoot Mining operates on sub-3¢/kWh self-produced power (gas, hydro, anaerobic digestion) and builds businesses for perpetuity by holding machine-refresh reserves; the public mining model prioritizes quarterly earnings over long-term survivability.

— For miners: Set aside machine-refresh reserves in Bitcoin and plan for 3–4 year ASIC cycles; establish backup pool configurations (e.g., Ocean with a local Datum gateway) now to pivot quickly if BIP-110 triggers a chain split at block 961632 in mid-August. Monitor that block height closely—the outcome will be clear within 1–2 hours as one chain pulls ahead.

— For Bitcoin holders: Before block 961632, complete any UTXO consolidation, cold storage transfers, or maintenance you planned; avoid buying Bitcoin during the uncertainty window around mid-August, and do not self-custody newly purchased coins during that period—use a major exchange and wait for settlement.

— For prospective miners: Enter mining during periods of despair (now), when equipment costs are lowest and capital is tight; build operations around self-produced power (gas wells, hydro, anaerobic digestion) at sub-3¢/kWh rather than grid dependence, and structure the business model to survive forever, not to exit in four years.