Bitcoin ‘miners’ face fight for survival as new supply halves

Bitcoin mining started out as a hobby for tech geeks using their home computers in the early years of the virtual currency, but has become more specialized as bitcoin usage expands.

As the bitcoin price has risen, as transaction numbers have grown and as the computers have become so specialised that they can only perform the function of bitcoin mining, a whole industry has emerged.

It can be profitable if firms are able to keep their expenses low. But the costs of running these machines, which cost around $1,800 each, and keeping them cool are fiendishly high.

Streng reckons that, on average, it costs about $200 in electricity, including cooling power, to mine one bitcoin. Equipment, rent, wages and business running costs are on top.

On Saturday, all else being equal, the halving of the reward will double that cost, to $400, leaving a small margin for profit at the current exchange rate of around $640 per bitcoin.

In the same remote region of Iceland as the Genesis mining farm, on a former Cold War U.S. military base lies a bitcoin mining facility belonging to U.S. firm Bitfury. A

Read more ... source: TheBitcoinNews

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