Crypto mining pool VP warns miners are at risk after BTC halving event
Crypto mining pool Vice President Alejandro de la Torre sounded off on the plight of bitcoin miners who are responsible for up to 30%of the network’s hashrate. He reports that the majority of the machines of these miners need to be turned off once Bitcoin mining reward halving is over.
Network hashrate below 25T/s is likely to shut down
Alejandro de la Torre, Vice president at major crypto mining pool Poolin, reported that his network looked into the hashrates distribution to know which of its miners are the most likely to turn off their machines. They found out that the network hashrate below 25T/s is likely to be shut down if the miner structure of the whole Bitcoin network is the same.
The data is illustrated in this Mining pool hashrate distribution graph from Poolin.com
The pool concluded that the miners who were ranging between 15%-30% of the Bitcoin network’s overall hashrates needed to be turned off after the halving event. In the past 30 days, Poolin was responsible for 17% of Bitcoin hashrates. De la Torre wrote in a current blog:
However there may be some that are capable to continue working if they are provided with enough electricity. We apprise that less than 15% of the lower quartile will remain,
Meantime, to compute the probability, cost, revenue, and difficulty must be considered. The price of Bitcoin has gone up again but if it drops, the miners who are not efficient will be pushed out quickly. Bitcoin is at the moment (00:28 UTC) trading at $8,886.74 and hardly changed daily.
The price is not higher than 15% in a week. It is possible to project at what electricity prices older extractors will cease being lucrative, according to de la Torre. In regard to halving, the maximum either of them can pay for electricity is 3.4 cents per kWh.
Crypto mining pool limited by power cost
Ranging between 20-16 T/s, which has the highest percentages of hashrates, only Bitmain’s Antminer S9K “hardly breaks even at 3 cents” per kWh. The range represents 46% of all hash power extraction in the lowest quartile.
Crypto mining pools will have to extract below 2 cents per kWh to remain lucrative once halving is over. There are only a few areas with such cheap electricity and not many countries allow crypto mining pools to operate due to competition with electricity usage.
Talking of extraction challenges, while it was appraised to drop a few days ago, Bitcoin mining pool BTC.com now appraise it will go up 1.41% tomorrow as more extractors have resumed their activities. The price is up 15% in a week.
As the halving is nearing, de la Torre warns:
Market instability is most likely to take place soon, while Bitcoin experiences a chaotic era for a while to modify itself back to a stable state post -halving and eventually and obtain a more efficient blockchain network.
This was the same problem mentioned in another recent post. The advent of the dry season in Southwest China makes it similarly difficult for the Chinese Bitcoin miners. There is a forecasted increase in electricity usage by residential and commercial centers. Power regulators would prioritize other essential sectors than crypto mining.
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