The price of bitcoin and mining have a certain correlation. It is therefore theoretically expected that a fall in prices will lead to a decline in mining or hash output – but that is not the case.
Bitcoins Hashrate seems to be showing that the mining industry is looking to position itself higher, at a time when profitability is not high due to a low Bitcoin price, which has fallen below $ 6,000. While the Bitcoin price has been declining since the beginning of 2018, the hash rate seems to be steadily rising.
Is there any correlation between mining and price at all?
When we look at mining in its current form, the correlation seems a bit confusing. The current hash rate of the Bitcoin network is 35,366,943,171 GH / s.
If the entire network consists of Bitmain’s S9 Miner, special ASIC miners designed to mine cryptocurrencies, this would mean a total of 252,621,022 Asics, each consuming 1.4 kilowatts, or a total of 3,536,694.
The costs of mining in terms of energy consumption and the resulting environmental damage have been widely publicized. Places like Iceland and China have become a hub of mining. Current energy consumption is estimated based on the consumption of all of Singapore, a country of 5.6 million people.
The average global cost of mining a bitcoin is between $ 5,700 and $ 5,800, with an average energy price of $ 0.08 per kilowatt-hour.
How does the growth explain itself?
Most of Bitcoin’s mining output comes from China, where electricity is cheaper than the average and could explain why the hash rate increases even as the average yield approaches the cost curve. However, the Chinese government wants to stop mining in its own country and has already begun to impose harsh penalties.
Regardless of profitability and even government intervention, Bitcoin Mining is still profitable today. The mining generates annual sales of about $ 6.3 billion at current market prices, but in turn costs only about $ 2.3 billion. This means that the Bitcoin price could theoretically fall by half and still be profitable in some zones. Also, when mining coins, remember that many speculate that the price will rise in the long run. So if you have enough liquidity, you can definitely suspend such a “crypto-winter”.
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