Bad news for bitcoin-miners from the United States: it’s time to turn off the equipment

Bad news for bitcoin-miners from the United States: it’s time to turn off the equipment

According to some estimates, Bitcoin has fallen to such an extent that in the United States it is no longer profitable to mine.

“Bitcoin is currently trading, in fact, break-even cost. Mining a single bitcoin costs $8 038 USA. The data obtained on the basis of the model of mining developed by our team for scientific research,” the report says Fundstrat, author Tom Lee.

Fundstrat model includes three factors: the cost of equipment, the cost of electricity and other overhead expenses, e.g., maintenance of refrigeration installations.

According to CoinMarketCap March 20, Bitcoin is trading around $ 8500. At the time of publication of the report on Thursday, March 15, the price was about $ 8000.

Bitcoin is created through an energy intensive process, using high computing power to solve complex mathematical equations. If the cost of creating a Bitcoin exceeds the reward, theoretically, miners lose incentive.

Co-founder and President of the Blockchain Intelligence Group Shawn Anstey believes that the time will come, and the miners just shut off their equipment:

“In some cases, miners can just disable the vehicle until the price will not grow back. You need to understand that some of them already suffering losses”.

Bitcoin mining today requires special equipment that can cost from several hundred to several thousand dollars. And, as with many technologies, always appear more efficient models.

The actual need for regular replacement of equipment is more than half of the cost of mining, said Sam Dr., head of quantitative research data.

According to Charlie Hayter, Director General for industrial data CryptoCompare, the income of miners this month was reduced approximately two times, if compared with figures of December. The fee per transaction, another source of income for miners, has also fallen from 34 dollars to 50 cents.

But do not forget that the price of electricity in the world is different, and therefore the cost of mining will be different based on location.

For example, in China, the miners have access to very cheap electricity. Four of the five largest in the world “mining pools” of bitcoins — the Chinese. To compete electricity costs should be less than 4 cents per kilowatt-hour. Model of break-even Fundstrat assumes an average of 6 cents around the world.

Analysts believe that the price of Bitcoin, which most miners will really begin to turn off their equipment ranges from 3000 to 4000 dollars.

Bitcoin is already traded near break-even value in January 2015, when the cryptocurrency was estimated at $ 200. He slowly started to increase before reaching its peak above 19,000 dollars. Since then, Bitcoin has lost more than half its value.

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