Following major price cuts in the cryptocurrency market that took away around -90% of the total value of all digital assets in the market, including bitcoin (BTC), mining of BTC became almost unprofitable, especially for small groups of miners and individual miners, however, Diar is reporting that this case is finally changing for better.
Despite the fact that “crypto winter” is still actively cutting the value of cryptocurrencies in the market, the mining of bitcoin is said to have become more profitable in oppose to the mining crisis noted in the previous period.
According to the latest report from Diar, miner margins are getting back on track while going through notable improvements in terms of growth.
Bitcoin Miner Margin Rising After 19-month Lows
The price of bitcoin in the market is surely affecting BTC miners as well, as rewards are being consequently lowered with the dropping price of bitcoin which is now far from its 2017 peak of 20k dollars per one unit.
In accordance with the declining value of the top and the original cryptocurrency, the rewards distributed to miners working on validating transactions on the chain have dropped as a consequence, leaving many miners with losses and lack of profit.
In most cases, these profits were not enough for the miners to cover their electricity bills, while “small-cap” miners also had to compete with ASICs, which additionally raises the competitiveness on Bitcoin network.
However, small-cap miners aren’t the only groups affected by the dropping prices, as Bitmain, the first consumer-level ASIC miner producing company was forced to close their operations in Israel due to the poor outcome in the cryptocurrency market during the last 19 months.
Bitcoin mining margins went south to touch the lowest returns back in February 2019, recording the lowest rates since August of 2017, according to the mentioned report by Diar.
With the latest change in the market, despite the bear trends still present in the crypto space, Diar further reported that gross margins increase in February of the current year, adding that the price improvement is evident with “only” -32% of drop in January 2019, in oppose to the previous period of January 2018 when the drop rate was set at -94%.
The Latest ASIC Models Prevailing During the Crypto Winter
Bitcoin mining rewards depend on multiple external factors, which includes the cost of electricity and the market value of BTC.
The rewards are also being halved every 4 years to match the process known as “Bitcoin halving”, which is how the rewards for miners are set to split in two in 2020, when the mining reward will decline once again, being halved from the current reward rate of 12.5 BTC to 6.25 BTC.
This case will consequently affect the profits that miners are receiving for their work on the network, which means that only the strongest ASIC equipment would be able to “survive” the mining game.
Bitcoin network is operating on Proof of Work protocol, known as far less cost-effective and energy-efficient in oppose to Proof of Stake consensus, which means that small-cap miners usually have troubles covering all mining cost, while the rewards are getting significantly lower with the declining prices in the market.
The latest ASIC mining equipment is able to provide more power and more efficiency to miners, also delivering increased success rate when it comes to validating transactions on the blockchain, which is why ASICs are ruling bitcoin mining scene.
For now, miners who had managed to survive the toughest period by far, referring to mining margin lows from August 2017 to February 2018, can take advantage of having bitcoin mining profits showcasing significant improvements for the first time in a year.
The post Bitcoin Mining Profits Back on Track as Signs of Improvements are Noted appeared first on Blockonomi.
Blockonomi.com is author of this content, TheBitcoinNews.com is is not responsible for the content of external sites.
Our Social Networks: Facebook Instagram Pinterest Reddit Telegram Twitter Youtube