This episode will be narrated taking some assistance of cat Garu also called Bitcoin cat because he has a heart of Bitcoin (BTC)
The Corona Disaster effects Bitcoin Mining Industry as well
We all hear about the catastrophic impact Corona has had on various businesses both small and big - from hotels, airlines, restaurants, manufacturing and production companies besides small companies like start ups, but we don’t hear about how the business of bitcoin miners are affected due to the Corona Virus lockdown, so let’s delve into that.
Hard to make money through Bitcoin mining Operation these days
The Bitcoin Blockchain functions because of miners, they are the ones who validate Bitcoin blocks and bring out BTC into supply after mining it. These miners are rewarded with 12.5 BTC as of now for validating each block of BTC, this is how BTC miners earn their money through block rewards.
However, these days it is becoming increasingly difficult for BTC miners to make money through the bitcoin mining business.
The Carona lockdown along with the unavoidable process of Bitcoin halving happening coming May 12th makes things even more tough for Bitcoin miners to make any money.
Bitcoin Halving reduces the earnings of Bitcoin Miners
Now, with bitcoin halving, Bitcoin miners would earn lesser as their mining rewards get slashed by half from 12.5 to 6.25 BTC. This means BTC miners would have lesser money to pay their electricity bills, pay their rent and they can’t afford the latest mining machines like Antminer S7 required to mine BTC more easily when bitcoin difficulty increases.
Right now, with the price of BTC being above 7000 $, many miners who operate on cheap electricity can make profits if they mine Bitcoin using the S17 Antminer machine but post halving since they will earn lesser BTC rewards, the price of Bitcoin has to be at least 8,500$ for them to even break even.
Therefore, lots of Bitcoin miners would shut down their operations post halving, and some of them will enter back when the Bitcoin mining business looks lucrative to them again, maybe that will be when BTC prices are high enough for these BTC miners to earn lucratively through Bitcoin rewards and fees that will go high that time as well.
Problem of procuring Bitcoin mining machines due to Global Supply chain disruption
However, the Corona Pandemic lockdown has already upsetted the business of Bitcoin Miners, as with this lockdown, Bitcoin miners are not able to procure mining machines and other essential electric infrastructure equipment that is essential to maintain the infrastructure for Bitcoin mining.
Shipment of Essential electric items for Bitcoin Mining operations not happening
All the mining machines manufactured in companies of CHina like Bitmain, can’t be shipped to other countries, with those services halted or badly delayed. So, those mining machines are stacked at their store house. More Bitcoin mining machines can’t be made as well, as the chips required for making those mining machines are manufactured in Taiwan and Japan.
Then the components of electric infrastructure that is needed for keeping Bitcoin Mining operations functional - panels, wires, relays, disconnects etc are produced by companies like Square D and General Electric located in America. This global supply chain disruption is making it challenging for Bitcoin Miners to even maintain basic infrastructure required for bitcoin mining operations, as one can expect some wear and tear in these equipment that needs repairs and replacement which can’t happen now.
The Small Bitcoin miners are out of the bitcoin mining game for sure, although they may if they have essential mining resources join other big mining pools and continue mining.
Various Bitcoin mining firms staying in the mining game adopting various tactics
Bitcoin Mining of late, is not generally a lucrative business. Although it’s a sophisticated business that runs on scale with Bitcoin Mining farms around. The big mining farms should survive on, although it’s a super competitive business to manage.
Now, nobody can make profits like before in the Bitcoin mining field, what with the cost of infrastructure required to run this business. Those who run big Bitcoin mining farms do it taking loans and getting money from investors willing to invest on Bitcoin mining farms. Later they make money by selling the Bitcoins they earned through mining strategically using the services of professional traders. Therefore, earnings look tight for the big bitcoin mining companies as well these days.
Special thanks to Cat Garu for this Episode!!
Well, cat Garu has been summoned by Mochu to come and play with it, so will have to end this article here.
As a symbolic gesture, Garu has narrated this Bitcoin mining story from it’s carrier cage because most of you are in lockdown. However, cat Garu refused to be locked in the carrier.He does not want to be in any severe lockdown inside home at least and cats according to World Health Organisation report states, I think that, cats are not proven to be effected or in danger of transmitting this novel Covid-19 virus, it transmits from human to human which is why humans are lockdowned around the world.
Article created taking insights from Crypto Lark's Youtube Podcast Episode - Bitcoin Mining Crisis
The content for this article is written taking inputs from the Bitcoin Crisis episode of Crypto Lark’s Youtube Podcast, where Crypto Lark interviews Bitcoin Miner Mr Krist who gives us the inside story of whatever situation is brewing in the Bitcoin mining industry.
You can watch the episode here - https://youtu.be/g_PHtek5GbI . For all you guys who want to learn and understand the crypto universe I highly recommend you all to watch Crypto Lark and Data Dash’s videos, they are informative, entertaining and truely valuable.
Data Dash Channel - https://youtu.be/WVf9G93owdA