Reading time: ~2 m
Despite the sharp drop in many cryptocurrencies on the market, the bitcoin mining industry is increasingly gaining momentum.
Who is afraid of the fall of cryptocurrencies? Definitely not mining farms, which continue their activities, as before everything that happened on the market. According to a report by the Cambridge Center for Alternative Finance, bitcoin mining companies are even experiencing a resurgence.
Far from being overwhelmed by the crisis, mining farms continue to resist all the prohibitions that are directed against them. For example, the Chinese authorities banned mining in the country, and some companies slowed down their activities after they were required to change equipment to a more environmentally friendly one.
Still, while this remains good news for the industry, environmental concerns are well-founded. An increase in hashrate means that farms consume more electricity.
Several leading individuals, such as Elon Musk, are looking for ways to make mining environmentally friendly. Meanwhile, however, events such as the ban on mining in China have only worsened the environmental footprint of the cryptocurrency.
An excellent indicator is the record income of Stronghold Digital Mining, which uses coal to mine bitcoin.
Mining farms continue to work in full force
Unfortunately, the collapse of bitcoin has only strengthened the financial goals of mining farms. To remain profitable after the recent drop in cryptocurrency prices, they must mine more and longer if they want to earn the same amount. The same applies to Ethereum farms, whose hashrate has also increased.
Over the past few months, Ethereum has been winning the fight against Bitcoin in terms of profits for miners who earn four times as much.
Nevertheless, the risk of mining collapse is still possible. However, mining fers continue to work in full force, without worrying about the consequences of their activities.
Consequences of the collapse of cryptocurrencies
According to an article published in Science Alert, the value of bitcoin has temporarily fallen below the cost of production several times without significant long-term damage to the hash rate.
However, if the market stagnates long enough, many will simply stop working with cryptocurrencies on the basis of proof-of-work consensus. Miners with the highest costs are likely to sell their bitcoin assets as profitability decreases, creating an even greater influx of offers to sell cryptocurrency.
Short-term suspension of activities among small mining companies (often using periodically renewable energy sources) is a normal phenomenon. However, the domino effect of the closure of large mining companies can lead to the fact that cryptocurrency prices and carbon emissions in the network will quickly fall to zero.
All information contained on our website is published in good faith and objectivity and for informational purposes only. The reader is solely responsible for any actions taken on the basis of information received on our website.
#Bitcoin #mining #profitable #collapse #crypto #market