How has Bitcoin Mining Profitability Changed after Halving?
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On May 11, the size of the Bitcoin mining reward fell by half. The next time it will be in 2024.
How has Bitcoin mining profitability changed after halving? What can owners of outdated equipment hope for? What devices will be profitable by then? In this article, we will try to answer these questions.
In May 2020, a halving took place on the bitcoin network. The bitcoin mining reward has decreased from 12.5 to 6.25 BTC. This is a long-awaited event, which, according to the hopes of the crypto community, should lead to a strong increase in the value of the coin. For example, Anthony Pompliano, co-founder of investment company Morgan Creek Digital, predicted that the rate would rise to $ 100,000 by the end of 2021, primarily due to lower mining rewards.
So far, the bitcoin price hasn’t responded to the halving as much as expected. In mid-May, at the time of the reduction in the mining reward, the BTC rate was around $ 9,000. To date, the cryptocurrency has risen in price by 27%. This year’s high was set on August 18, at $ 12,400.
How did the hashrate respond to halving?
The hashrate of the cryptocurrency network showed different dynamics. Its value fell immediately after the halving from 137.5 to 87 EH / s, according to bitinfocharts.com. Since mining bitcoins has become less profitable, some of the miners probably turned off their equipment. They could switch to mining other coins or completely abandon this activity due to its unprofitability.
Later, when the BTC rate began to rise, the amount of computing power in the coin’s network also began to increase. So, from late May to mid-August, the cryptocurrency hash rate increased from 87 to 130 EH / s. But over the past three days, the indicator has dropped sharply by 20%, caused by floods in China. Torrential rains in Sichuan province caused power outages that interfered with the operation of mining farms.
Changes in hashrate and mining rewards have affected their difficulty. On May 11, at the time of the halving, this figure was at around 16.1 T. By the current moment, this value has increased to 16.9 T, in July rising to a maximum of 17.3 T.
Increased fees due to halving.
The decline in the reward for mining cryptocurrency was partially offset by the increase in fees. Until May, a single BTC transfer cost the user an average of 50 cents. By the current moment, commissions have grown more than 10 times, to $ 5.5.
Mining profitability is now at around 0.114 THash / s. It fell sharply immediately after the halving from 0.16 to 0.08 THash / s. The current situation index rose by 40%. This was due to the rise in BTC prices and higher fees.
What devices are profitable to mine now?
Development Director at BitCluster Dmitry Shuvaev said that the profitability of the device for mining BTC s17-73Th / s is now about 8 thousand rubles ($110) per month (at an electricity price of 3.5 rubles per kWh). The payback period is about 15 months. Old devices, such as the Antminer S9, are now unprofitable to use, they do not bring profit. But this situation may change if the bitcoin rate rises to $15,000.
“We recommend our customers to buy the new generation S17 or S19 devices. It is these devices that will provide profitability until the next halving. Their break-even point is at $6,000 per bitcoin.” – Shuvaev said.
In June, experts from the research division of the BitMEX exchange said that in the long term, 2-3 ASIC miner manufacturers will remain in the industry. Canaan’s Avalon devices were the first to hit the market in 2014. Three years later, in 2017, Bitmain took 75% of the market.
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