Bitcoin mining is the backbone of the cryptocurrency model, like Bitcoin. The miners facilitate the generation of new Bitcoin by verifying the transactions and adding them to the blockchain ecosystem. Although the Bitcoin mining landscape has evolved highly in the past few years, especially after the massive rally of bitcoin in the last month of 2017, many complications emerged due to the expensive of electricity.
Bitcoin mining has expanded from a group of individuals to corporate firms. Many companies are involved in this process of bitcoin generation and established their mining rigs in some remote and cold areas. The reason behind utilizing cold area is cutting the electricity cost that spends on cooling down the equipment. The mining equipment solves a cryptographic puzzle to verify every block. This process requires enormous and constant electricity, and therefore miners are heading towards places where electricity is available at a lower price.
The bitcoin halving 2020 will result in reducing the reward that miners receive for verifying every block by 50%. Currently, miners receive 12.5 BTC per block, and this reward will reduce to 6.25 BTC per block after bitcoin halving event that is expected to take place in May 2020. While the cost of energy is increasing along with the advanced machinery, the miners will be forced to take measures that ensure the mining process remains profitable. The new equipment is capable of efficient processing with improved hash rate and decreased energy consumption, and the miners are still looking for ways to reduce the cost of mining to cut a profit after the halving event.
Furthermore, the recent significant decrease in the overall hash rate and the shutting down of mining rigs could have an adverse impact on the Bitcoin network. According to Genesis Mining CEO, a cloud-based mining firm, Marco Streng, said in a podcast that there is an abundance of energy available on earth to keep the mining infrastructure running; however, the cost of energy is the decisive factor. He asserted that renewable energy could be one of the major sources to ensure profitable mining in the coming years. The mining rigs are usually settled in remote areas where the source of clean energy like wind power and solar energy can be viable options. The shift towards renewable energy will also eliminate the atmospheric pollution generated due to the high consumption of electricity. Moreover, the utilization of clean energy sources could drastically decrease the electricity cost and sustain profitable mining operations.
Also Read: Bitcoin Demand would Increase Exponentially Post Covid-19: Analysts Forecast
John is working as a professional news editor at GetIgnite. He is accustomed to finding daily reports. Therefore, this keen working and addiction towards his work, it helps him to find good news.