The crashing crypto market has changed how operations are done around the crypto world. Miners are the most affected, the price of a single Bitcoin has fallen so much, and the cost to mine a Bitcoin is far greater than the price of the coin itself. This year has seen the worst of the market, coin prices plunging and the market has become totally unpredictable. The price of the original coin is on a steady decline and as a result of it, other Altcoins also started the downwards curve.
Miners heavily rely on the price of Bitcoin to carry the market responsibility; the price of the coins should stay above the point where they can make a profit after spending a hefty amount for the mining components and mining energy. Recent past, miners were not even able to reach the break-even point; miners are pushed to a point where the thought of stepping down from mining is increasing.
The cost of building the rigs, starting from the purchase of high-end components to replacing the parts to build a better GPU has made it difficult for miners to leave the mining environment. Some miners are adjusting their strategy and pattern to make a profit out of the crashing market. This can be a game changer and they have to adjust till the market regains its hold and soar again. This is an opportunity for the miners to get freed from the binding shackles and think of an alternative path that may help them in the years to come.
Mining, not so profitable
The final month of the year witnessed more than a 15% drop in the hash difficulty of the original coin that was the start of a declining era. It was the second lowest point hit by the coin after October 2011. The difficulty rate is set a dynamic one and the drop in it reflects the activity on the network. Hash rate of Bitcoin has dropped more than 30% since November and this has led to the flight of miners from the market. Why miners have left the scene? It is mainly due to the falling crypto market and ever decreasing profits, mining revenues are halved when compared with the previous month’s statistics.
This is not looking good for the short term conditions also, in spite of some enthusiastic miners hoping for a better market, the crisis is clutching the operations of most of the miners that to miners associated with the Bitcoin blockchain are suffering the most. Hopes of a better market tomorrow may not help the miners anymore.
Energy, resource, and other operating costs with the current revenue is not a happy situation for any miner to be in now
Miners made total revenue of $4.7 billion in the year 2018 but smaller mining operations are unable to keep up with the larger setups.
Most of the smaller mining and miners are planning for an escape route that can lead them out without having them to sell off their equipment. Reselling the components and system used for mining will result in a further loss for the miners; the crashing market will lower the price of the components with significant wear. This can be the perfect time for miners to choose other alternative paths if not then escaping out is the only option left for the miners.
When miners choose to leave the field then there is one commodity that they can offer, raw computing power. Ever increasing difficulty in the hash rates have led to the use of computational power in different ways, gigabytes of data coming primarily from GPU’s. Evolving technologies such as artificial intelligence, machine leering and neural networks require more power than what a single computer can offer, so a miner’s system can be used for these types of technological operations.
Hoping for a soft end at the end of the slide some miners is seriously considering the option. Raw power offered by the miners set up will help all the evolving technologies.
A few mining companies have started to rent out their computational power in the face of crisis, organisations requiring such computational power are greatly benefited by the miner’s raw computational power.
Several Blockchain platforms are approaching the computational problem in a better way. It will be easy for any miner to shift their computational power towards other technologies; instead of shutting down their rigs converting them for another purpose during crashing market will be a profitable path for the miners. Whatever may be the technology if it involves blockchain technology then it will be easy for miners to switch back and forth, they can get back into mining when the market begins to rise.
Drown or diversify
With a volatile market, the fortune of a miner also fluctuates, which is not a good sign. It can be highly profitable to mine in a bull market but extended bull market is hard to generate revenues. The present trend helps the larger miners they are able to buffer their cost and can remain operational even at the time of crisis.
In the case of smaller miners, they have no other option but to diversify their resource, this can keep them afloat in the crashing market. This approach will help the miners to survive the ongoing storm and when the market bounces back they can switch back to their usual mining operations. Market conditions can get better in the coming days but still, miners need to survive for witnessing the better days.