As of now, the entire crypto industry is eagerly waiting for the BitIQ to halve. In this blog, we will briefly explain that the block reward may decrease from 12.5 BTC to 6.25 BTC. This likely resulted in a massive halving of up to 50%, meaning that the supply of new BTC could be completely halved! There is also some more information about BTC Halving here. Here we will try to give an idea to the BTC miners on how to increase the profit after halving.
What Is Bitcoin Halving?
The bitcoin halving is an occasion that happens when the award for mining BTC is totally sliced down the moiety. This process happens every four years. Whereas BTC’s mining algorithm offered a halving policy to counteract inflation while maintaining scarcity. In theory, a decrease in the speed of BTC issuance means that if demand remains the same, the price will increase as well.
David Weisberger who is a person who is the CEO of the trading platform Coinroots, BTC has an inflation rate of less than 2%, which may decrease even with further declines. Kris Klineville, chief operating officer of BTC IRA, explains that the scarcity of BTC production plays an important role in defining its fragility, and when the reward is reduced, supply constraints are likely to be created. And in the meantime, rising demand when supply is constrained can have a very positive effect on the price, making BTC attractive to investors.
What the Halving Means for Bitcoin Miners
Bitcoin miners typically use ASIC machines dedicated solely to computing hashes using the SHA-256 algorithm. On the other hand, if we talk about bitcoin halving, then after that, the mining reward will be completely halved. This is considered a harsh reality of BTC mining and there will be many miners who will not be able to cover the operating costs of running a mining farm. There will be some who will be forced to shut down and some who will need to find alternatives. So when the halving happens how can miners survive and thrive going forward?
Why is NiceHash good for ASIC miners?
If miners rent their hash-power to NiceHash, they receive consistent payments in BTC – regardless of whether they are run by an ETH ASIC or whatever. So even if BTC mining becomes unprofitable with SHA-256, NiceHash will transfer this hash-power to another SHA-256-based coin and still be able to provide payouts in BTC! And if ASIC machines are combined with NiceHash, each mining farm may be able to hedge its risk with volatile price changes when mining different coins. Even after the BTC halving, ASIC machines may be advantageous in the long run.
How the Bitcoin Halving Has Affected Bitcoin Miners
The bitcoin halving has also revealed some implications for the miners. One of which has reduced the reward for mining. As a result, many small miners or those who do not have BTC mining equipment are faced with this ecosystem as they need better bitcoin mining computer systems, strong BTC mining graphics cards, or a decent budget for cloud mining. Competing with miners with power has to do. Furthermore, if we talk about BTC mining efficiency, it completely depends on the crypto price itself. On the other hand, if ever there is an increase in the price of crypto, then the number of miners may decrease. This can also lead to more network attacks when seen up to 51 percent, as miners usually move away from the network after this possibility, resulting in more blockchain protection problems.