Almost a third of bitcoin mining farms could shut down their mining machines as business turns unprofitable post-bitcoin halving, as businesses turn unprofitable due to the lowering of BTC mining rewards.
The third bitcoin mining event that was completed yesterday slashed the supply of bitcoin, reducing the incentives paid to miners for their efforts by half to 6.25 BTC per block. According to the vice president of Poolin Mining Pool, Alejandro De La Torre, BTC miners who make up 15 percent to 30 percent of the total bitcoin network hash rate are already in the process of shutting down their equipment as profit margins fall.
Miners with outdated rigs to shut down post-bitcoin halving
Indeed, mining companies that use old obsolete mining rigs such as the Bitmain S9 miner, which consumes more energy, will have to be the most affected, according to Poolin’s vice president. In his recent analysis, he wrote:
“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.”
Occasional halving events put a lot of pressure on the miners, as the incentive has a 50 per cent effect on the revenues produced by the mining companies. Nevertheless, some experts believe that the dip in income is indemnified through a spike in the price of the flagship digital currency; an accomplishment often associated with the past two halvings. Regardless of the argument, the less effective mining firms will be pushed out of the game easily.
Bitcoin mining is all about durability
According to Poolin VP, this is a long game that relies on durability and survival. He claims that mining companies that are unable to reduce the cost of mining to keep up with the most powerful mining rigs on the market must pay the price.
No matter how miners feel about their revenues, the new bitcoin halving event means their rewards; it will be halved for every block mined. Post-bitcoin halving, bitcoin network complexity, total hashrate, and the price of bitcoin could be big statistics to keep an eye on.