Bitcoin mining has become unprofitable as up to 800.000 miners were turned off in November.
The sharp decline in the value of digital money has led to the fact that many entrepreneurs are forced to exit the market as their devices operated at a loss, Mao Shixing the founder of F2pool mining pool has said in an interview to Coindesk.
With the current market situation - as of November 25, the price of bitcoin dropped to $3,600, the work of miners who use Antminer T9 + from Bitmain and AvalonMiner 741 from Canaan Creative became unprofitable, and over the past two weeks, from 600 thousand to 800 thousand of similar devices were disabled.
The expert explained that bitcoin cash hardfork, which took place on November 15, along with the rise in electricity prices in China and high competition between mining equipment manufacturers who produce new models making the old ones unsuitable for work, greatly affected the industry.
Last week, Mao published a video in with hundreds of devices for digital currency mining lay near an unknown building, they were taken out on a trolley and thrown on top of each other, forming a pile. The comments under the post noted that the video is in fact old and that the equipment seen was damaged by floods in the summer of 2018.
Also, the founder of F2pool showed a photo in which the miners are being sold by weight. Mao explained that these are old models that no longer work, so they are sold as non-ferrous metal. The specialist explained that the devices released in 2016 or 2017 do not bring profit because of the low cost of bitcoin.
“Bitcoin mining is always a dynamically adjusted process. The latest data shows the bitcoin mining difficulty has already declined slightly by 5 percent within the past a few days”.
Meanwhile, the Norwegian government has prepared amendments to the state budget, according to which the cost of electricity for miners will increase by 34 times.
If now the price of a kilowatt for miners is about $0.05, then in January it will increase to $1.94. According to the data of the mining company Northern Bitcoin, the cost of mining one bitcoin in Norway is about $7,700. In China, for example, this figure is significantly lower – $3,100.
Recently it became known that authorities of Paraguay approved a plan to build a cryptocurrency mining center in the country, which will become the largest mining enterprise in the world.
The relevant agreement was signed by the Government of Paraguay with the Commons Foundation. The bitcoin mining complex will be built in Ciudad del Este, which is popular with tourists.
The bilateral agreement states that the government of Paraguay will allocate a land area of about 50 square kilometers, located next to the Itaipu hydroelectric station. Miners will consume electricity at stable tariffs over the next 15 years, as well as use all available communication systems.
The head of the Commons Foundation, Choi Yong Kwan, stated that only 10-20% of the electricity produced by Itaipu hydroelectric plant is consumed in Paraguay, and the authorities export over 80% of electricity to foreign markets.
Subscribe to our Telegram channel to stay up to date on the latest crypto and blockchain news.