Bitcoin Price Crash Forces the Chinese Miners to Sell Their Equipment As Junk
It is not only the HODLers who are affected by the recent dip in the price of bitcoin, as a report by International Times, published November 23, 2018, posits that cryptocurrency miners in China are selling their expensive mining rigs at giveaway prices.
Bitcoin Miners Not Able to Breakeven
It appears that shine associated with cryptocurrency mining is steadily waning off, as a recent report states the crypto market slump has forced miners in China to sell their expensive machines in second-hand markets to realize their scrap value.
The reason for such a drastic measure is not too hard to guess, as the miners are no longer able to cover up the electricity costs incurred while running these machines.
Bitcoin mining rigs are infamous the world over for the amount of power they consume. In fact, a number of organizations and personalities have voiced their concerns over its impact on global warming.
However, one of the major counter-arguments laid by crypto proponents was that of increased earning opportunities due to mining activities. Unfortunately, news of miners selling their equipment at scrap price doesn’t bolster this argument.
It is worse for people who got into the mining business after bitcoin came into prominence in late 2017. Machines bought at prices close to $2900 are hard to sell for even $15 in 2018.
Bitcoin Cash Hashwar to Blame?
While the collapse of a multi-billion industry cannot be attributed to a single cause, many believe that the ongoing bitcoin cash (BCH) hash war has been largely responsible for the plunge in cryptocurrencies value.
The hard-fork that went live on November 15, 2018, caused cryptocurrency trading platforms the world over to temporarily halt trading and withdrawal of BCH. This affected BCH miners adversely, as they suffered losses in tune of millions of dollars.
Is There a Future for Bitcoin Mining?
While mining giants like China’s Bitmain continue to mine bitcoin profitably, courtesy of economies of scale, the increasing cost of mining has spooked the small and medium-scale miners.
BTCManager reported on November 23, 2018, how GigaWatt, a U.S. based crypto mining giant had to file for bankruptcy due to the thinning profits in the industry.
Several governments around the world have also raised their concerns over the long-term repercussions of unchecked cryptocurrency mining. Seeing the intensive amount of electricity cryptocurrency mining consumes, Washington State’s Chelan County Public Utility District (PUD) has proposed a rate hike for mining enterprises within the region.