Bitcoin mining becomes unprofitable for individual miners
The cryptocurrency market stable, with capitalization of $216 billion, Bitcoin is at an important support level from which growth is possible, with the immediate short-term goals $6650 and $6792. The current price of coins $6541, over the past day the price dropped on -1,17%.
Protracted flat period had a negative impact on the profitability of mining. According to recent reports, miners earned $4.7 billion in 2018. Although the figure seems impressive, consider the fact that the number of people willing to run the business greatly increased, which led to decrease of profitability, since the remuneration of miners fell, but electricity costs remain the same, and some where raised.
This made the extraction of digital money unprofitable, even for the largest pools of miners. The profitability of small miners that pay for electricity at retail prices, was zero in 2018, this was the first time in history. Thus, we can expect that soon some players will leave the market, unable to continue, this became not profitable for their business.
In 2018, income from mining bitcoin was $1.7 billion higher than in 2017. But the situation on the market is extremely complex, and even such major players as the Chinese mining-pool Bitmain experiencing difficulties. In particular, Bitmain has been forced to allocate its capacity among different countries to reduce spending on electricity.
This is not the first time that a major company, earning on mining forced to change the conditions of their activities, adapting to market changes. For example, the famous “cloud miner” Genesis Mining closed customer contracts, saying that because of the decline in rates of digital money some tariffs have ceased to be profitable.
This forced Genesis to offer its clients go to a five-year premium contract, because the other options of doing business was no longer profitable. Correction cryptocurrency market and the growing complexity of the network has led to contracts that generated less than the size of their daily service, were closed.
Mining becomes more complex and energy-intensive, so companies have to revise their fiscal policies. And the miners lone forced to sell their equipment and to leave the market.
In turn, reducing the number of active miners will lead to higher rewards for mined block, because is a fierce struggle for survival, in order to stay in this market and grab the same “tidbit”. Further fueled the greed of the knowledge that the amount of bitcoins is strictly limited, and mine will be harder and harder, and the rising cost of cryptocurrency due to their limited number forces many miners to sit for months without a profit, and pay the electricity bill in minus,.
“International Financial Center”