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Why is now the best time to mine cryptocurrencies?

mine cryptocurrencies

Why is now the best time to mine cryptocurrencies?

Mine cryptocurrencies. Why is now the best time to do it? The relocation of digital asset mining companies from China triggered a drop in the bitcoin hash rate by more than 50%. What is happening with the mining market now and is it worth it for new players to enter it?

Over the past two months, several important events have taken place in the cryptocurrency mining market. By the end of June, the hashrate of the Bitcoin network had dropped by more than 50%, compared to mid-May. This is because in June more than 70% of Chinese miners were forced to stop working.

The PRC authorities are tightening the regulation of cryptocurrencies in the PRC. In June, four Chinese provinces completely banned cryptocurrency mining. Banks and other financial institutions in China are now banned from transactions related to cryptocurrencies and cooperation with companies whose activities are related to digital assets.

Due to the bans in China, large companies have already started moving equipment to other jurisdictions. BTC.TOP and HashCow were the first to take such a step. On June 6, it became known that another large cryptocurrency mining company, IBC Group, is closing data centers in China and transporting equipment to the USA, Canada, the United Arab Emirates, Kazakhstan, Iceland, and the countries of South America.

During the last recalculation, the difficulty of Bitcoin mining fell by a record 27.94% (to 14.36 terrachesh). According to the forecast of BTC.com, during the next recalculation, the difficulty of mining the first cryptocurrency will decrease by another 28%.

Mining difficulty is a parameter inherent in the blockchain that sets the required amount of power to find one block. The complexity of the network correlates with the hash rate. The higher the hashrate, the greater the difficulty of mining and vice versa.

The opportune time to enter

Now a unique situation has developed on the mining market: equipment prices have decreased, and the profitability of mining has doubled. Thanks to this, there was a favorable moment for entering mining. The main question is where to place the equipment since the demand for sites outstrips supply tenfold.

After recalculating the complexity of the Bitcoin network, miners began to receive more profit than before the massive outage of equipment in China. All this benefit is being eaten up as bitcoin has fallen in price over the past two months. This is how the internal calibration of the bitcoin network works: the network provides incentives for miners when the coin rate falls and some of the miners decide to stop mining coins. The hash rate drops, the remaining miners get more coins, this attracts new miners to the network.

Recall that Bitcoin mining is one of the most expensive ways to mine cryptocurrency, as it means buying specialized, expensive equipment, finding and renting a suitable site connected to the power grids, and servicing.

Time to recover

The migration of miners from China to other countries can continue for two years. To accommodate everyone, you need to build huge data centers, and this process is slow and costly. Some data centers in North America are signing hosting contacts as early as 2023.

How to enter the market?

To start mining bitcoin effectively and reduce the risk of equipment breakdown, you should start by purchasing 500 modern miners like Antminer S19r. With such volumes, production will be significant, and the risk of incurring a loss due to breakdowns is minimal.

There is currently no way to purchase the Antminer S19 on the manufacturer’s website Bitmain since they are all sold out on pre-orders before the end of the year. In the secondary market, the cost of one Antminer S19 ranges from $ 6.5 thousand to $ 7.9 thousand. The average purchase price of 500 miners will be $ 360 thousand. To this amount, you must add the cost of renting a data center, paying for electricity and equipment maintenance. These costs can vary greatly and depend on various factors.

At the end of June, it became known that Bitmain had suspended the sale of mining equipment to move production and employees from China to other countries.

Bitxmi experts remind you that many other coins allow you to earn money by mining. The threshold for entering mining on video cards is much lower. Nekrasov claims that 3-5 video cards are enough for a start.

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Disclaimer: Bitxmi News is a news portal and does not provide any financial advice. Bitxmi's role is to inform the cryptocurrency and blockchain community about what's going on in this space. Please do your own due diligence before making any investment. Bitxmi News won't be responsible for any loss of funds.

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