According to recent happenings among Bitcoin miners, the ongoing crypto winters have become their largest hindrances. Many have faced unimaginable losses leading to sale of shares, equipment and crypto holdings. Furthermore, since Ethereum’s move to PoS, many have questioned the relevance of Bitcoin mining and other PoW consensus mechanisms.
Crypto winters bad for Bitcoin mining?
Reports all over the year indicate that the crypto winters have vastly affected Bitcoin mining. Earlier this year, crypto.news reported on different sagas where crypto miners were facing tough times due to the bear market reducing their profit margins.
This November, the winters in the markets have even worsened, with Bitcoin coming close to dropping below $16k. Drastically, several top Bitcoin miners have been selling their machines and holdings to cater to their debts.
The drop in the value of BTC is likely the main reason for ongoing troubles for miners. Essentially, miners’ incomes are reducing, while costs are either the same or increasing, forcing them to abandon mining and sell their equipment.
With the crypto winters hitting harder, miners’ Bitcoin holdings are continually devalued hence, why many miners are selling their holdings.
Mining Hashrate is spiking ahead of the halving cycle
While Bitcoin mining is increasingly becoming troublesome due to the market conditions and also the hash rate is also increasing. For instance, when writing this report, the Bitcoin network hashrate had increased from 249.81 million yesterday to 255.32 million today, a 2.21% rise. This hash rate is also a 64% increase from 155.23 million a year ago.
Hashrate increases when new miners join the ecosystem. Since Ethereum’s move to PoS, the Bitcoin mining hashrate has been increasing. Many former Ethereum miners switched to BTC mining to utilize their equipment.
With the Bitcoin halving event just a year away, investors should likely expect further increases in mining hashrates. Many miners will join the industry to benefit from Bitcoin mining benefits.
Bitcoin mining is still better than PoS
A recent press release from JKL Group discussed the relevance of PoW when compared to PoS. According to the statement, PoW is still a better model than PoS staking. For instance, the press stated, “U.S. regulators have a longstanding history of scrutinizing PoS blockchains.” Furthermore, the press statement noted that;
“The process of Proof of Work mining has 3 features that make it an efficient grid load balancer. First, PoW provides a stable and continuous demand for energy. Second, PoW mining operation can be switched on and off at any time. Third, PoW mining process is location agnostic.”