Bitcoin’s halving has been the talk of the cryptocurrency town for the past couple of months and now that the event has occurred, the community is waiting with bated breath for price changes. Although the halving marks a major event in Bitcoin’s history, it spelled doom for many of the Bitcoin miners across the globe.
Recent reports showed that the halving may result in almost 30 percent of all Bitcoin miners to shut shop. Several factors such as reduced rewards, increasing electricity prices, and geographical difficulties have all contributed to this gloomy fact.
In a recent interview with Bitcoin.com, the VP of mining pool Poolin Alejandro De La Torre claimed that several miners who make up a large chunk of the industry were abandoning the trade. He added that the final difficulty adjustment with the 12.5 BTC block subsidy will occur one week before the halving at 1008 blocks. He continued in a recent statement:
“We expect that the first 1008 blocks after the halving will be mined slowly as huge numbers of unprofitable miners drop off the network. We estimate around 30% of the entire Bitcoin network will be squeezed considering that the first 1008 blocks will have the pre-halving difficulty, but half the reward.”
After the third and last halving, the mining rewards per block were reduced by 50 percent to 6.25 BTC. De La Torre pointed out that mining and mining organizations using old machinery, such as Bitmain’s S9 miner, will be the most affected by the change. The only way that companies could pull out of this rut is if the value of Bitcoin increases significantly.
Experts have recommended miners to switch to faster machines that would enable them from escaping the void. Even De La Torre claimed that mining was a long game about survival and that organizations that fail to innovate will capitulate. In the worst-case scenario of Bitcoin’s price falling, more miners will be squeezed out of the Bitcoin ecosystem.
During press time, Bitcoin was trading for $8920 with a total market cap of $160.98 billion. The price remained stagnant for hours as the 24-hour market volume rose slightly to $56.566 billion. The last major fluctuation occurred before the markets closed on May 11 when BTC’s price fell from$8912 to $8425 in a matter of hours.
Miners in areas with cheaper electricity may still have a shot at surviving after the halving. There are miners who defied all odds during the earlier halvings to remain in the game. The first Bitcoin halving occurred in 2009 when the block reward was reduced from 50 to 25. The current 6.5 BTC will be a hard figure to digest for those miners who have been in the game since Bitcoin’s inception.