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What will mining be like after the Halving of Bitcoin?

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One of the most important events for the crypto community is just a few days away from happening, being the Bitcoin Halving. And, in addition to the price of Bitcoin after Halving, the main unknown is: What will mining be like, will there be any changes?

Bitcoin Halving and its mining

Bitcoin (BTC), the cryptocurrency born out of the 2008 Financial Crisis, is within days of its third Halving. The BTC event involves halving the rewards per block, from 12.5 to 6.25.

The event has an impact on two fundamental variables: the price of BTC and mining. Furthermore, it is important to note that these variables affect each other.

In particular, the price of Bitcoin will likely determine the profitability or not of many miners after Halving. What will happen?

Natural selection

The impending halving of block rewards calls into question the profitability of many retail miners, and consequently keeps all eyes on the event in anticipation.

Therefore, Bitcoin Halving brings with it many changes in the crypto industry.

Are you not profitable? Goodbye!

The only way for retail miners to be saved is through a drastic rise in the price of Bitcoin. Will it happen? Not known.

The profitability of mining activity depends on: Bitcoin price, cost of electricity, the efficiency of the mining machine and the difficulty of Bitcoin. Any movement of these variables the profitability is put at risk.

In this sense, Mehran Fani, a Bitcoin miner, assured that his break-even point would fall between $ 13,500 and $ 15,000 after the Halving of Bitcoin. At the current Bitcoin price, Fani would not be able to cover its costs and would cease to be profitable.

Therefore, many hope that Halving will lead to the removal of the least efficient miners and will probably recalibrate the global hash rate.

Alejandro De la Torre, Vice President of Poolin, assured that the BTC miners responsible for up to 30% of the hash rate are the most vulnerable and could be forced to shut down their equipment after Halving.

In fact, he assured that those miners with electricity costs higher than 3.4 cents per kWh, will not be able to survive. In this sense, I assure you that they expect most of the miners to shut down their equipment.

“As new, more efficient ASICS come online in the coming months and existing miners find lower electricity prices, older generation miners will inevitably be phased out.” sentenced.

Obviously, said forecast is as long as the price of Bitcoin does not double until breaking its historical maximum of $ 20,000.

Precisely F2Pool’s Thomas Meller assured CoinDesk that if a significant price change did not occur during the two weeks prior to Bitcoin’s Halving, he and other miners would have to abandon the “Older machines”.

Will there be a decentralization of activity?

In this regard, experts in the crypto industry seem to be waiting for mining after Bitcoin’s Halving to become much more decentralized globally.

Recall that, currently, China’s mining groups account for 65% of Bitcoin’s hash rate. In fact, the Cambridge Center for Alternative Finance (CCAF) has just released an interactive map showing the average monthly breakdown of the Bitcoin hash rate by different countries.

In this sense, according to the recent tool, the United States is in second place with 7.25%, closely followed by Russia and Kazakhstan with 6.90% and 6.17% respectively. With the exception of Malaysia and Iran, the rest of the countries contribute to Bitcoin mining with less than 1%.

In particular, some experts expect North America to see an increase in their share as they offer cheap and renewable energy sources.

China’s miners appear to have been leveraged to obtain the mining machines. The problem is that, after Halving, they will have to spend part of their rewards on their obligations.

Obviously this is a significant risk, as the rewards may not be sufficient. And, in that case, they will not be able to cover the costs of the activity and their financial obligations.

According to Decrypt, Samson Mow of Blockstream, assures that we can already see how part of the mining moves to North America.

Without a doubt, the Halving of Bitcoin and its consequences will cause a reorganization of mining activity towards those countries that offer the greatest advantages.

Follow Crypto Trend closely where we will bring you the latest news regarding the most important event of the year: Bitcoin Halving.



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