Miner surrender: can all mining farms be closed?

    Майнинг биткоина после халвинга
    Bitcoin mining after halving

    On May 11, bitcoin survived its third halving, and now the block reward is 6.15 BTC. In this article, we will examine how things are going with bitcoin mining after halving, what is the hash rate, which ASIC devices give the greatest profit, and why are blocks in the BTC network still not mined as expected?

    Theme number two will be the surrender of miners. Why are they selling more than they are mining, is this threatening the price of bitcoin and can there be a hidden meaning? And what happens if all the industrial miners close?


    After a halving

    Биткоин после халвинга
    Bitcoin after a halving

    So, this happened, and the block reward decreased to 6.25 BTC . Probably the most important question: what to mine now, and as The Block research shows, the two most profitable ASICs are Whatsminer M30S ++ manufactured by MicroBT and Antminer S19 Pro from Bitmain:

    [ 19459021]
    Assessment of ASIC miners by profitability by The Block rating

    Note that this assessment was carried out at a bitcoin price of $ 9,700, and now the profitability of both devices has noticeably decreased, but they the best the industry has to offer today.

    It is expected that after the bitcoin halving , we encountered certain problems in the network, and they still have not been completely resolved. So, on May 17, a kind of anti-record was set, when the miners mined a total of 95 blocks per day, instead of the laid 144:

    It is not surprising that with such performance blockers formed in the blockchain, which not been quite a while. The current workload of the mempool is still high:

    Размер мемпула биткоина
    Bitcoin mempool size

    Miners try to manipulate the decrease in complexity and increase immediately after it the hashrate , but in fact they still can’t cope. Therefore, the number of confirmed transactions per day goes down:

    Транзакции в блокчейне биткоина
    Transactions in the Bitcoin blockchain

    Total, the bitcoin network cannot fully recover from the consequences of halving, and the reason may be that miners refuse to leave the market. After all, they could disconnect for a long time, give the difficulties , significantly decrease and then work at a convenient level.

    Instead, if we look at the complexity of the network over the past 30 days, it seems to have decreased and noticeably:

    Сложность сети биткоина

    Bitcoin network complexity [ 19459006]

    But the same schedule, but for the last year, and here it is clearly visible that the complexity of the network did not even think to fall:

    Сложность сети биткоина за последний год
    The complexity of the Bitcoin network over the past year

    In the best case, this can be called a “hit the plateau” situation, as we are often told in the media now, albeit for a completely different reason.

    The hashrate situation is similar: we seemed to decline based on a peak of 136 EH / s immediately before the halving:

    Хешрейт сети биткоина
    Bitcoin network hashrate


    But in annual terms, the bitcoin network significantly increased, and this does not closely resemble what should have been after halving the block reward by half:

    Хешрейт сети биткоина за последний год
    Hashrate of the Bitcoin network over the past year

    It turns out that the miners are working hard and the news says they are capitulating.


    Капитуляция майнеров биткоина
    Surrender of bitcoin miners

    After a halving occurred, there was no significant redistribution in the network capacity between major players:

    Кто добывает биткоин
    Who is mining Bitcoin

    China and three local localities remain the clear leader in the production of bitcoins mining pool F2Pool, AntPool and BTC.com hold more than 50% of the hashrate. In principle, everyone is used to this, and interestingly, their performance has not yet fallen, despite the fact that one of the main Chinese mining provinces of Sichuan has demanded to temporarily stop mining farms:

    [ 19459008] According to media reports, miners love this region because of cheap hydroelectricity, but now the province has a drought and therefore the freebie is temporarily over. It can be assumed that instead of shutting down, miners temporarily agreed to pay more for electricity and therefore the hash rate did not drop. But why do they make such sacrifices?

    The main version is that miners suffer huge losses and are forced to sell more cryptocurrencies than they get:

    So, in the last seven days before May 25 they sold 955 more bitcoins than they mined. This is necessary in order to pay operating costs to support the work of mining farms . But the more sales, the lower the price, and it turns out that in the long run, miners do only worse. And the fact that they are forced to sell is confirmed by the bitcoin complexity tape:

    Лента сложности биткоина
    Bitcoin complexity tape
    ☝️ [19459004 ]

    She shrank again, and this, by the way, is considered a good time to buy.

    But how is it: miners dump the price, but this may be a good opportunity to buy? After the price goes down under the pressure of sales, weak miners will leave the market, and those who remain will receive comfortable working conditions. That is, they will mine much more bitcoins than they need to service mining farms. Thus, a shortage of new bitcoins will appear on the market and demand will push the price up.

    But what else can force miners to sell bitcoins , except as a payment for electricity? Such a reason may be competition, and this is what they talked about before halving. Large miners can specifically dump bitcoin in order to re-divide the market after halving, taking even more hashrate.

    Mining was closed

    Возможно ли закрытие майнинг-ферм
    Is it possible to close mining farms

    So, you should know the structure ] Bitcoin mining . The one to whom it is not beneficial simply disconnects, and this gives the remaining participants the opportunity to increase their profit. Such a simple and at the same time ingenious approach suggests that mining, by its nature, cannot stop completely. In the most extreme case, let us return to the fact that we will do it again on home computers, as the once Satoshi and the very first miners.

    We also see that the third bitcoin halving could not repel the interest in the first cryptocurrency from large industrial miners. But what will happen after the fourth halving, and after the fifth? After all, each time the reward for the block will become less and less, and it is not known whether the price increase will compensate for the continued work.

    Can all miners leave bitcoin

    What if not, what if today's huge mining farms eventually turn into abandoned hangars with a bunch of rusty equipment? Could it be that many industrial miners go bankrupt and leave the business? Or even cooler, can it happen that in general all the major miners exit the game?

    In fact, it is quite possible, not tomorrow of course, but after eight or twelve years completely. And this does not mean that bitcoin will be worth a penny, at that time prices of $ 100,000 or $ 200,000 per coin may well be very small. Just the reward for the block will be too small to make sense to mine on an industrial scale.

    And, perhaps, it will even be good, because then in the house of almost every bitcoin user a couple of ASICs will appear and it will help maintain the network. Finally, a real decentralization will come, and let them work in the red, but you are infecting your smartphone from the wall outlet and paying for this electricity. So, in the future it may be with Bitcoin, if you want to use it, if you want to control your finances yourself, then be so kind as to take on certain expenses.

    Read also:

    Coronavirus vs Bitcoin: China disables mining farms

    May 11 halving: what is waiting for bitcoin through month

    Bitcoin farm: how to create and buy a Bitcoin farm

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