With block rewards decreasing due to the Bitcoin halving and the Bitcoin network and hashrate growing, it’s an important time for Bitcoin miners and mining pools.
As competition for the Bitcoin block reward grows it gets more difficult to win it. Therefore, it’s important that miners get ready and upgrade their systems in preparation for the halvening.
How Block Rewards Decrease
The Bitcoin halving is a quadrennial event that cuts the mining block reward in half.
The block reward is basically newly minted bitcoins that are paid to miners. This is as a reward for their computing power which hashes and secures the Bitcoin network.
Because the block reward is cut in half, the event is known in the Bitcoin space as the Bitcoin halving or halvening as some prefer to call it.
The halvening is predetermined and will continue to drop by 5% every 210,000 blocks until the last fraction of bitcoin is mined.
This will be the third halvening, and its set to take place in May this year. Once it does the block reward will only be 6.25 new bitcoins.
Related Reading: 5 Profitable Altcoins To Mine in 2020
Will The Halvening Affect Mining?
According to blockchain analytics provider Tradeblock, after the halvening takes place the cost to mine a bitcoin will be between $12,000 to $15,000.
Many miners wont be able to afford mining at a loss, and will wait until the price readjusts, which isn’t guaranteed but is expected.
How long a price rise will take nobody can be sure of, but Bitcoin mining will be profitable again, if it hasn’t readjusted before the halvening event.
Bitcoin Hash Wars Will Escalate
However, the competition for the block reward will ramp up. So miners will need to acquire the newest ASICs mining rigs to be competitive.
Bitmain recently announced they’re releasing new Antminers in preparation for the halvening.
The Antminer S19 Pro will process between 95 to 110 TH/s, which is up from 67 TH/s that the S17+ could hash.
Bitmain competitor, MicroBT also plans to launch its upgraded M30 model later this year, and with 88 TH/s its up from 60 TH/s its WhatsMiner M20 can pump out.
So the manufacturers are ramping up the hashrate war its imperative that miners and mining pools get ready.
Being the supplier of the Antminers, of course Bitmain will benefit from the release of its new Antminer S19 Pro. So, we might see more hashpower going back to its mining pools BTC.com and Antpool.
This could lure more miners back to Bitmains two mining pools but with trust still evading them, many will prefer to stay away.
You can be sure F2Pool and Poolin will be ready for the halvening.
They’re the two biggest mining pools by hashrate and block production. But it’s going to be necessary for solo miners in the mining pools to get hold of the new mining rigs. That is if they intend to earn a piece of the BTC block reward.
Bitcoin mining is going to be a major industry in the years to come.
As the hashrate and mining difficulty rises, the need for newer and more powerful mining rigs will be a necessity.
Bitmain has dominated this space, but other manufacturers are catching up. In the years ahead it will be interesting to see how it plays out in the years to come.
But for now, solo miners are going to have to get their hands on the latest mining rigs. That’s to give themselves a chance of winning the block reward.
Author: Tommy Limpitlaw