Home
News
- 1 After every 21,000 blocks, BTC mining rewards are slashed in half.
- 2 This event is called Bitcoin halving, which is expected in April 2024.
History suggests that a significant surge follows the halving of BTC prices. During 2012, halving prices gained 8,450%; in 2016, they jumped by 290%, and in 2020, BTC prices gained 560%. This time, the miners are worried about the event.
How Would Miners Cope With A Bitcoin Halving Event?
The Bitcoin mining community has long been marred by a trifecta of problems, rising energy prices, increasing mining difficulty, and bitcoin price volatility. Out of these factors, miners can manage only one issue, power. It is known that mining Bitcoin is a very energy-intensive procedure that needs to meet environmental, social, and governance (ESG) parameters.
During the research, the Head of Research and Blocksbridge, Wolfie Zhao, found that the average cost of mining 1 Bitcoin is currently in the range of $10,000 to $15,000. This investment will swell after the halving to around $20,000 to $30,000 per BTC. JPMorgan analysts claim it will reach around $40,000.
Even if the average mining cost is considered to be $30,000 after the halving event, the BTC price must be significantly higher than $30k for the miners to be profitable. Most of this cost is spent on supplying power to the mining rigs. If miners can solve this problem, the BTC volatility below the threshold could be managed with limited losses.
Nearly 92.5% of Bitcoin’s total supply of 21 Million is already mined, and only 7.5% of the stash is left. With the rise in the number of miners, the mining difficulty is bound to touch new highs. However, since the last 24 hours, the mining difficulty has been constant at 52.33 T, and it is bound to rise after the halving event of April 2024.
Miners will have to install advanced rigs, increasing investment and power demand. This scenario may increase the difficulty required to mine 1 BTC. For the miners to be profitable even after such a considerable investment, the BTC price will have to be significantly higher than the current levels.
How are Bitcoin Miners Solving the Energy Requirement Puzzle?
To cope with rising energy prices, miners are switching to renewable and unique solutions. Flare gas mining is one option, where the byproduct of the oil extraction process is used to mine BTC. The gaseous byproduct, methane, is usually burned in flares on an oil rig. Despite being a potent energy source, it isn’t easy to transport.
Miners are now installing operations surrounding these oil and natural gas mining platforms. Miners are utilising this flare gas to power the mining equipment. Farmers in Europe are turning farm waste into biogas to power Bitcoin mining machines. The mining community also explores solar and wind power options.
Some of the miners are even exploring the use of nuclear power. Nuclear power is clean, uninterrupted, and a continuous source of nearly unlimited ability to benefit Bitcoin miners. Even though the initial cost of setting up a nuclear power plant is enormous, considering the expected rise in BTC prices, it seems worth it.
It is very early to estimate the Bitcoin price after April 2024, but miners are getting ready for the volatility that would take place during the Bitcoin halving.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
