The cryptocurrency market is a free market, which, when restoring equilibrium, is also facilitated by the mechanisms laid down in the Bitcoin protocol, mechanisms that will significantly help those who remain afloat, despite the fact that operations have become much less profitable.
Although this is less obvious, it is one of the most interesting and, even if we don’t like the term, stable characteristics of Bitcoin, as well as a very good indicator of its potential sustainability in the medium and long term. Resistance, which we can also bet on.
Yes, there are relatively quiet times for Bitcoin miners now. We are still very far from the price highs, which according to the data Coinmarketrate.com , were reached last year at almost $70,000, and, obviously, structured miners, perhaps even burdened with debts for the purchase of current and future machines, are also suffering in terms of financial stability.
Is this crisis useful for you? It’s not too much, but it’s still a rebalancing mechanism.
A situation that has already led to the fact that several companies have gone out of business and closed their machines, and the overall hashrate has decreased, although so far to a controlled extent. Big problems for the whole system? Absolutely not, for a number of reasons that are already embedded in the functioning of the Bitcoin protocol, functioning that will allow the market to restore balance.
The fewer miners involved in the project, the more profitable their participation
This is an aspect that those who are not even familiar with the work of Bitcoin in general terms will definitely ignore. The mining difficulty is actually periodically adjusted depending on what the average block mining time was over the last period.
The average time increases when there are fewer miners, and adjusting the complexity makes operations more profitable. This is not a real-time adjustment mechanism, but a periodic mechanism, every 2,016 blocks, i.e. in the standard average production time every 2 weeks or so.
Let’s see how the situation will develop further. At the moment, the most problematic situations may be those of structured miners who have ordered a large number of machines and therefore now find themselves unprotected from the hashrate, which on average has become much less profitable.
There is also little harm here: Bitcoin was born in order to also eliminate the concept of collateral. And this is exactly how the ecosystem surrounding it should behave. Those who have not been prudent in allocating their capital will go out of business (at least until prices really rise again). Cleaning the market, which, unfortunately, also periodically goes through failures.
How much do miners earn now
It depends on the data we take for granted. According to MacroMicro today, the average Bitcoin production price is about $17,600, which is slightly more than the actual market price.
We remind you that this is an average indicator, so some will earn, and others, others will watch, that is, they will be at a loss. As the difficulty adjusts over time, the price will adjust and return to equilibrium for Bitcoin mining. This is not a completely painless process, because hashrate is in some sense also a security measure of Bitcoin. But since the falls are so modest anyway, there’s not much to worry about.