It’s the sundown for BTC miners, some experts warn. As per their assessments, it is no longer lucrative to produce crypto-coins.
Not As Before
In particular, Tom Lee, the analyst at Fundstrat, says that at present bitcoin mining brings zero profits in a sale. With BTC being traded at $8, 038, the result has been found out thanks to the company’s mining model.
This pattern combines three factors, Lee explained on March 15, CNBC reports. They are:
- the cost of facilities
- sustaining cooling apparatus as well as other overhead expenses
According to Coinmarketcap.com, bitcoin’s price saw its lowest $7,783 at around 8 AM UTC on March 15. This is the result, seen for the first time since the early February.
How Has Mining Become Unprofitable?
For those, who have been living under a rock, bitcoin is generated during the energy-consuming process, called mining. This process involves the work of high computing capacity to resolve complicated math equation.
As miners finish the equation, they receive bitcoin as a “trophy.”
But, apparently, if the expenses on bitcoin mining (electricity, supplies, etc.) surpass the price bitcoin itself (which is a reward), miners will hypothetically lose motivation.
Shone Anstey, the head of Blockchain Intelligence Group, says that miners can merely stop their activity until the price of BTC increases to its previous norms. Therefore, either they stop mining or continue generating coins at a loss they are still going to lose money.
It is also noteworthy that nowadays the production of bitcoin is in need of specialized hardware. And it may cost from hundreds to some thousand dollars. So if miners are not able to keep producing coins, all the money that they invested in tools is going to be wasted either.
Moreover, if they want to keep up with their rivals, they have to buy newer facilities or update theirs, which, obviously, is also expensive.