After the halving, will there be a large-scale shift in mining?

The much-anticipated Bitcoin halving is only a few days away. Miners are looking forward to the arrival of satisfactory market conditions and the changes in the computing power of the entire network after the halving.

Currently, many miners are discussing that the upcoming halving of Bitcoin block rewards may be extremely unfavorable to them, but many industry analysts believe that the booming cryptocurrency mining industry in North America has the opportunity to fill the possible market gap.

Not only in North America, but also in European countries, France and Germany have introduced favorable policies accordingly. Miners have become the main force to consume excess electricity. Under the condition of "negative electricity price", mining does not need to pay electricity bills, but can even receive money. However, "negative electricity price" is actually the result of extremely unstable electricity resources. Nevertheless, this seems to be a great thing for miners who have been suffering from high electricity costs.

Judging from historical experience, the halving of Bitcoin block rewards usually eliminates a group of inefficient miners, and the global miners' computing power share will also be readjusted. With the arrival of the third "halving" in Bitcoin's history, some industry insiders believe that some domestic miners will be eliminated.

Will there be a large-scale shift in mining after the halving?

70% of the world's mining machines are in China. The reason why China has gathered most of the world's computing power is mostly due to the low domestic costs. Compared with foreign policies, domestic policies are more direct.

In April this year, the People's Government of Ya'an City, Sichuan Province, issued a document to clearly support mining during the flood season. The document states that "we must give full play to Ya'an's hydropower resource advantages, form a win-win situation of sufficient hydropower consumption and healthy and orderly development of the blockchain industry, and build Ya'an into an influential blockchain industry gathering place in the country."

Compared with Europe's "negative electricity prices" where electricity resources are extremely unstable, China has abundant water supply, stable electricity and stable water supply. It is expected that this year's abundant water supply will last for 5 months from the end of May to the end of October. 70% of the world's mining machines are in China, and 70% of China's mining machines are in Sichuan, and Sichuan's hydropower resources rank first in the country.

This year’s flood season coincides with the Bitcoin halving. Many people believe that the mining cost will increase after the halving, and miners will be more sensitive to energy consumption, which will be beneficial to the flood season. In fact, the sluggish market before the halving has already led to a large number of mining machines being removed from the shelves, and it is expected that another wave of inefficient mining machines will be eliminated after the halving.

For miners, whether mining can bring profits is the most important factor in deciding whether to continue mining. However, it is not just the electricity price, but also the high management fees and operating costs that are a problem facing miners.

As we all know, compared with foreign countries, domestic management fees and operating costs (labor costs) are much lower.

Miners often have to travel around to find suitable electricity resources. Sometimes, a few cents of price difference can be a matter of life and death for miners. The mining industry seems simple, but if you want to get involved in the mining industry, you need to pay attention to every link, from upstream chip research and development, mining machine production, to downstream power distribution and equipment transportation. Even when mining machines go abroad, miners still have concerns about their safety.

After halving, the computing power of the entire network dropped by 20%

Due to the impact of reduced mining costs, the computing power of the entire network often surges during the flood season. The reason is that many mining machines that were shut down due to electricity costs will be restarted during the flood season when there is cheap hydropower. The surge in the computing power of the entire network will lead to an increase in mining difficulty, which will directly affect the output of miners. Therefore, before the flood season arrives, many miners will choose to expand the computing power scale of the mine.

Flooding can be said to be an important driving factor of the bull market. However, this time the flooding coincides with the halving, and the influencing factors and actual situation will become more complicated. Considering factors such as the distribution of existing mining machines, it is predicted that the computing power of the entire network will drop by 20% after the halving.

Summarize

Although there are attractive policies abroad, there are too many uncontrollable factors. Miners need to have a stable mining environment while being able to control the mining machines. Compared with the current loose policies in China and the improvement of the market, it may be redundant to consider exporting mining machines. After the halving, the total network computing power will decline briefly. Due to the scarcity of supply, more people will be optimistic about Bitcoin, and the total network computing power will soon return to normal.

In short, the real "mining paradise" is China, and mining in China is the most cost-effective.