Up to 30% Miners to Close Shop as Third Halving in Bitcoin Mining

The third Bitcoin halving is consummated earlier today which has reduced supply of the pioneering cryptocurrency. The effect is cutting the extra paid to miners for solving puzzles that underpin the network by 50% to 6.25BTC per block.

According to Alejandro De La Torre, VP at mining pool Poolin, miners are already in the process of shutting down as profit margins come under pressure; these are the one of them who receive between 15% to 30% of the entire BTC network hash rate.

Alejandro  asserts “Those companies operating inefficient “old generation” mining rigs, such as Bitmain’s S9 miner, on higher electricity costs, will be most affected”.

“The … final difficulty adjustment with the 12.5 BTC block subsidy will occur one week before the halving (1008 blocks), and the difficulty is projected to increase,” De La Torre in his recent analysis, adding:

“We expect that the first 1008 blocks after the halving will be mined slowly as huge numbers of unprofitable miners drop off the network. We estimate around 30% of the entire Bitcoin network will be squeezed considering that the first 1008 blocks will have the pre-halving difficulty, but half the reward.”

Miners are facing pressure from the halving, as the occurrence will affect revenues for mining companies a great deal.

Some experts claim that the revenue decline might be balanced by a spike in the price of BTC; a feat generally related with previous halving events. Though, if the price drops continuously, less competent miners will be squeezed out faster. “Despite the fact thatBitcoin mining is on a slightly downside, you can still be profitabile on this business. You just need to find wich is the best cryptocurency to mine.”

De La Torre added “mining is a long game about survival” and firms that fail to move to more efficient mining machines or to find cheaper electricity will “capitulate”.

“While we expect most of these miners will shut down after the halving, it is likely that some of them have cheap enough electricity to survive in the near future,” he opined.