Crypto News:
Bitcoin miners’ resilience is being tested as the network’s halving erodes their bottom line.
On April 19th, rewards for new blocks halved from 6.25 BTC to 3.125 BTC, driving mining hash prices to their lowest in four years, hitting $0.04 per second on July 4th.
Miners are also bracing for a 5% drop in Bitcoin mining difficulty, the second-largest decline since the 2022 FTX collapse shook the industry, evaporating 7% of Bitcoin mining layers.
Taras Kulyk, Founder and CEO of SunnySide Digital, a Bitcoin mining data center provider, commented, “The 6% difficulty drop is a rational economic response from global miners to what we’ve seen in hash prices.”
He told The Defiant, “For most miners, this isn’t pain but relief from the rapid rise in hash rates we’ve witnessed.”
Kulyk’s sentiments are echoed by Anthony Power, Co-Founder of Power Mining Analysis, who said, “For North American Bitcoin miners with the most efficient mining fleets and low-cost energy, the difficulty and hash rate drop could actually be good news. They’ll be able to effectively achieve higher Bitcoin yields.”
Halving Strain on Networks
Bitcoin mining, an energy-intensive process where specialized computers known as ASICs race to find random numbers in astronomical ranges, secures the network by awarding BTC rewards every ten minutes on average.
Per protocol rules, every four years or 210,000 blocks, the network halves block rewards. This reduction aims to slow down the creation of new Bitcoins, thereby limiting new supply into the ecosystem.
This event typically accompanies a mass exodus of miners.
Focus on Operational Efficiency by Major Mines
Kulyk noted that his team observed large-scale digital miners focusing on improving operational efficiency over expanding hardware purchases in the past two months.
He said, “Once Bitcoin prices show a new uptrend, we’re likely to see those on the sidelines continue to snap up new-generation hardware to extend the refresh cycle of older hardware.”