As the Bitcoin halving approaches, significant shifts in the network’s hash rate are anticipated, potentially leading to the offline status of up to 20% of the current hash rate. According to analysts at Galaxy, over 70% of the Bitcoin hash rate is generated by just eight ASIC miner models, highlighting the concentration within the mining ecosystem.
Galaxy’s analysis factors in post-halving economics, including a reduction in block rewards from 6.25 BTC to 3.125 BTC, transaction fees constituting 15% of rewards, and a Bitcoin price of $45,000. Based on these parameters, they estimate that between 15 – 20% of the network hash rate could potentially go offline.
The analysis suggests that older mining rigs, such as Bitmain’s S9, Canaan’s A1066, and MicroBT’s M32, may face shutdown, while newer models like the Antminer S19 and S19J Pro could remain operational. However, operational costs and efficiency will play a significant role in determining which models survive the halving.
Miners using older, less efficient machines may resort to custom firmware or sell their rigs to those with cheaper power costs to maintain profitability. Conversely, miners with newer models might face challenges in sustaining profitability, potentially leading to the acquisition of older rigs for upgrades.
The Bitcoin halving is expected to occur around April 20, at block number 840,000. The ensuing impact on the hash rate and mining ecosystem remains uncertain, but the potential offline status of a significant portion of the hash rate underscores the dynamic nature of the cryptocurrency mining landscape.
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