Saturday, June 10, 2023

Mining Issue may Weaken Bitcoin


Bitcoin mining are under strain, and the effect is reverberating downwards, putting downward pressure on prices.

The phenomenal rise of cryptocurrencies in 2021 attracted hundreds of newcomers to mining, or the process of creating new coins. As a result, the hashrate has more than doubled in the last six months, surpassing 200 million “terahashes” every second. The harshrate is the total processing power of bitcoin miners around the world.

Price of Bitcoin

Miners are more likely to sell rather than hold their newly minted cryptocurrency as the hashrate rises. This makes it more difficult for them to earn coins and cover their costs of hardware, electricity, and staff. As a result, many are more likely to sell rather than hold their newly minted cryptocurrency. This exerts a bearish force on the market.

“Keeping or selling newly minted coins is a miner’s discretion based on their operating costs. Their activities have a big impact on the price of cryptocurrencies. This is because they are the first and most natural sellers in the market. Institutional sales director Justin d’Anethan commented on the situation.

According to Arcane Research, the total value of coins held in miners’ wallets has decreased to roughly $75 billion. Arcane Research is an Oslo-based crypto research organization. It went down from $114 billion at the beginning of November. This is because increased hashrate and dropping prices squeezed their profitability.

According to crypto industry analytics firms, miners have been sending more coins to exchanges than adding to reserves. This indicates a sale or desire to sell.

Such transfers are adding to the pressures on bitcoin, which has been caught up in a worldwide market selloff. Tensions on the Ukraine border and the Federal Reserve’s tightening of policies triggered this selloff.

Bitcoin is currently trading at $37,400, down 40% from its November 10 peak of $62,000.

What it Costs

In simple terms, bitcoin mining is the process of a network of computers checking and validating a block of transactions. Before it is added to the blockchain. Miners are compensated when they complete a block.

However, it is a costly industry that necessitates not only sophisticated and fast “rigs” costing upwards of $10,000. Also, it is a tremendous amount of power. It’s also growing more expensive.

According to data from, the seven-day average of total mining cost per transaction confirmed has dropped to $176.8 from $235.57 in May of last year.

“Each miner earns fewer bitcoins as more miners join the network. In order to slow the creation of new bitcoins, network difficulty rises “Joe Burnett, an analyst at Blockware Solutions claimed as much. Blockware Solutions, a company that specializes in infrastructure and miningBlockware Solutions is a company that specializes in infrastructure and mining.

Because some institutional investors are reluctant or hesitant to engage directly in cryptocurrencies, they buy shares of listed miners or ETFs that follow miners. This is an alternate way to obtain access to the fledgling industry.

Marathon Digital Holdings (MARA.O) and Riot Blockchain (RIOT.O), both U.S.-listed crypto miners, have lost 66 percent and 52 percent, respectively, since early November.

Since its introduction in early February, the Valkyrie Bitcoin Miners ETF (WGMI.O) has traded at an approximately 5% discount to its net asset value. On the other hand, the Viridi Clean Energy Crypto-Mining & Semiconductor ETF has lost 23% since the start of the year.

The Last Bitcoin

The intrinsic nature of bitcoin puts some pressure on miners. A total maximum of 21 million coins make up the anonymous blockchain. Of 21 million coins, people have already minted roughly 19 million.

One block takes around 10 minutes to mine. The reward for miners (now 6.25 bitcoin per block) is half every four years.

“It doesn’t matter how many miners there are. One block is all that is accessible. Also, there are only a limited number of bitcoins in existence “saye d’Anethans of Amber Group

Finally, don’t lose sleep over what will happen when people have mined the last bitcoin; it won’t happen until the middle of the next century, around 2140.

Christina Jones
Christina Jones
Christina Jones is the owner and CEO of Cryptoconstellation Before starting Crytpoconstellation, Christina spent ten years as an Editor in Chief at a well-known publishing house, Editorial Planeta SL, in Madrid.

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