Bitcoin: the situation is getting worse for miners

While the Bitcoin (BTC) price plunged nearly 40% this month, many minors may not survive the next halving.

A certain number of bitcoin miners, especially those who do not have the latest equipment, may not be able to cope with the next halving of mining awards on the bitcoin network and have to disconnect.

In May 2020, the first cryptocurrency on the market will indeed see its 3rd halving. The rewards distributed to minors for validating and securing operations on its blockchain will automatically pass from 12.5 BTC to 6.25 BTC per mined block.

This month, Bitcoin (BTC) price is down almost 40% following the heavy turbulence in traditional financial markets caused by the uncertainty surrounding the Covid-19 pandemic.

The fall of the course under $ 5,500 thus intervenes at a critical moment given that minors will soon see their pay cut in half.

The price of Bitcoin must be around $ 7,400 for a average miner be profitable. It becomes negative around $ 4,500. Many are likely to close their facilities right away as expectations for a rally continue. If this does not happen, many will close after halving, ”Said Chris Bendiksen, head of research at CoinShares on Bloomberg.

Note that when the hashrate (deployed mining power) of Bitcoin drop its difficulty then adjusts, making it easier for new miners to enter and preventing the blockchain from coming to a complete stop. The lower hash rate, however, makes the network less secure and resistant to potential attacks.

Greenidge Generation, a New York-based power plant that recently installed 7000 Bitcoin ASICs brand new on its premises, believes it can continue to mine after the halving since it operates new machines and does not depend on other energy suppliers.

According to our estimates, people using Antminer S9 miners or older generation are not profitable unless their cost in terms of electricity is less than 4 cents / kWh, ”Added Sale Irwin, CEO of Greenidge Generation.