Bitcoin mining has been the talk of the town lately, despite the high fluctuations in the coin’s value. Though the woes for the coin are ever increasing, the crypto community hasn’t lost the hots for the coin. Even now, it is dominating the crypto market’s trade volume, standing tall at 43.4%. But, the bitcoin mining community is in a state of panic as the mining costs have hit the skies despite the fall in the coin’s value!
Bitcoin mining is the process of verifying the Bitcoin transactions, thereby adding new blocks to the Bitcoin blockchain. Mining requires a huge amount of computing power, electricity, a highly efficient cooling facility, etc. which all add up to a lot of investment in monetary terms. At the moment, the reward for adding a block to the chain stands at 12.5 BTC.
What’s alarming is that the Bitcoin hash rate, which is nothing but the amount of computing power used by Bitcoin network to mine new coins, keeps increasing irrespective of the coin’s price. Also, the difficulty of adding a block has increased significantly over the past 1 year.
Over the second half of 2017, the price of almost all cryptocurrencies saw the moon. Bitcoin, in particular, almost reached $20,000 after starting the year at a significantly low price of $1000. This attracted several people to involve in Bitcoin mining, which increased the competition by several folds.
From the beginning of this year, Bitcoin price has taken several major hits, reducing it to today’s price of $6,410. This, however, hasn’t reduced the hash rate. Over the last 4 months, Bitcoin hash rate has increased by 100%. The coin’s value has reduced by approx. 35% during the same time.
If the trend continues, the cost of mining one Bitcoin could very well cross the value of one Bitcoin itself. The head of research at Fundstrat Global advisors, Thomas Lee, predicts that the cost of mining Bitcoin could reach $9000 by the end of 2018, taking into consideration the steady increase in the hash rate. But, would Bitcoin be able to break the bearish markets and reach a price at least double that of the mining costs?
The predictions say that Bitcoin would reach $20,000 by the end of 2018. But the reality is that the future of cryptos can’t be predicted. There are several of them who say that the second half of the year will be much profitable compared to the first, but have no solid proof to back their statements. But the predictions of the mining costs do have a reliable proof.
So would you still be interested in mining Bitcoin even if you’re not making a considerable profit off of it? How would you counter the issue? Looks like the Bitcoin mining community is in need of a solution to handle the fast approaching problem.
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