Cost of mining Bitcoin could affect your quote


Currently, two factors influence the low cost of mining Bitcoin, just a month after the Halving. The first of them, is the start of the rainy season in Sichuan province, China. The other, is the low difficulty for mining.

Certainly, when analyzing the behavior of the price of the Bitcoin, these factors seem blurred at first sight. But, in the complex world of criptomonedas, everything is closely related.

The premise is that, currently, mine is more expensive than you thought at the beginning of the year. This fact could lead to a fall in the price of Bitcoin.

Why is the cost of mining Bitcoin can be considered under?

In February of this year, the firm TradeBlocksaid that after the Halving, the cost of mining Bitcoin would be about $15.000. Before clipping, the same was nearly $7.000. However, a month after the event, everything looks very different to that forecast.

The cost necessary to mine Bitcoin, currently ranges between $5,000 and $8,000 depending on whether it is a miner’s small, or a center of great magnitude. Comparing the total expected by the above-mentioned signature and the actual amount, it is evident that the cost is considerably low.

This situation has favored the young miners, and, of course, also to big. The first, they were practically condemned to disconnect your equipment or, in the best of cases, to redirect them to undermine other criptomonedas. It was at that moment that it appeared the two factors that froze the cost of mining.

First factor: the rainfall in the Sichuan province

The arrival of winter to the province of Sichuan, it is a fact that impacts annually the price of Bitcoin. During this time, will produce large surpluses of energy in the hydroelectric power plants. The cost of electricity down to the $0.04 per kilowatt/hour.

So profitable to mine with this price of electricity, which the miners of other regions, switched off their computers and move to Sichuan. The result of these favorable conditions, is expressed in that, to the farms of great magnitude, the cost of mining Bitcoin is in this moment between $5,000 and $6000.

For young miners, the cost is higher, approximately $8,000, then due to that your most used S9. This mining consumes a large amount of energy in comparison to their low productivity. Despite this, their profitability is maintained.

Surplus of energy in Sichuan reducing electricity costs, influencing in the cost of mining Bitcoin. Source: Xinhua
Surplus of energy in Sichuan reducing electricity costs, influencing in the cost of mining Bitcoin. Source: Xinhua

Second factor: the low difficulty to extract bitcoins

The second factor, not less important, to the average cost of mining 1 Bitcoin is low, are the successive periods of decreasing difficulty. Recently, the difficulty fell by 9.26%.

The adjustment of the difficulty of mining Bitcoin, it happens every breaking 2,016 blocks, or two weeks. But what is rare, is that the adjustment to decrease occur several times consecutively.

Well now, How could the low cost of mining Bitcoin influence its price? Specifically, why it would cause a deep correction? Basically, the time factor is conclusive.

Neither the rainfall nor the low difficulty to mine will be eternal. The next 16 of June, there will be a new difficulty setting and will probably be on the rise. For its part, the rainy season in Sichuan concludes around October. In short time, it is likely that by themselves, do not constitute a factor in overall weight.

The stability comes to an end

The increasing difficulty to mine Bitcoin, it will cause the inevitable “exit game” miners obsolete. At the same time, the hash rate will increase with the entry of the new models of ASIC.

In response to this, a large number of miners would be forced to capitulate and start selling their bitcoins to cover operating expenses. The selling pressure pushed the price to a correction after a period of stability in regards to the cost of mining Bitcoin.

Before the uphill that has been done so far to Bitcoin, to overcome the psychological barrier of $10.500, all indicate that a correction is inevitable. Though you should be aware that the behavior of this criptomoneda is complex to make predictions. On countless occasions, an outcome almost certain in one direction, has ended in the counter to the amazement of the analysts.

In that sense, it should be taken into consideration that, according to metrics Glassnodetransfers miners to the Exchanges have tended to decrease. This means that the amount of bitcoins produced is superior to that which is directed to the sale. This, in simple terms means a possible price rise due to a shortage of supply.

Tech Junkie is a small word for Vikas Kaushik. Whether the latest game on the market or a new gadget launch he is the go-to person. He drives his motivation from the fast-paced technological advancements. He ensures that the right news reaches niche audiences. An avid biker and movie buff he has deep-rooted faith in upcoming technological inventions and is a torchbearer for the tech revolution.

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