Bitcoin miners: Bitcoin plummets, should we leave or stay?

In the first half of this year, although some miners left the Bitcoin mining industry, most miners were not affected by the sluggish market of this virtual asset. However, in recent weeks, as Bitcoin has continued to fall, the mining industry can no longer hold on and has been greatly affected.

In the first few days of this month, the mining difficulty of the Bitcoin network dropped by 15%. Since the mining difficulty of Bitcoin is proportional to the number of miners, the mining difficulty will be adjusted every two weeks or so in response to fluctuations in the hash rate.

This means that Bitcoin has entered a life-or-death challenge, and it can indeed prove that the decline of Bitcoin has greatly reduced the cost of miners and the profit margins they can obtain. In fact, many people have predicted that in 2019, the entire virtual asset market will become different from before.

Although the cost of mining varies greatly depending on the scale of operations, energy costs and other factors, the market downturn has accelerated the elimination of old miners. Recently, the market sell-off has hurt miners even more than ordinary investors. According to foreign media reports, the cumulative Bitcoin mining revenue in December dropped from $13 million in early November to $6 million per day, outstripping the trend of Bitcoin price decline.

It is reported that as of December 3, the number of blockades found per day was 21.8% lower than the expected 144 per day due to miners leaving the market before the difficulty adjustment, resulting in a decrease in the number of blockades found. Therefore, in the short term, in addition to the impact of falling prices, mining incentives have fallen by 21.8%.

Some analysts believe this could mean Bitcoin has entered a “death spiral” mode, in which it endures a vicious cycle of miners shutting down their machines before lowering the difficulty again, further extending the intervals between difficulty adjustments.

Some people believe that most miners have to leave the market because they have to lose money mining Bitcoin because a lot of their money is invested in the virtual asset field. However, some people do not think so. They think that miners have a longer-term vision, which means they have also invested in equipment.

And they usually buy electricity on a long-term basis, rather than on a weekly basis, so the loss during these months won't be too great, and they won't shut down if the equipment is already complete.