Bitcoin miners are afraid that they might be at a risk of becoming unprofitable. Miners are the one that makes complex calculations to generate cryptocurrency. We saw yesterday that Bitcoin defends the price level of $ 8000. If the price of Bitcoin drops below the threshold again for a long period, then it is likely to affect the small bitcoin miners.
According to Bloomberg, in an interview with the venture capitalist, Bill Tai said,
“The bitcoin mining industry was this mysterious dark cottage industry, and it’s about to grow up and about to have elements of institutional scalability at all levels.”
Bill Tai is chairman of Hut 8 Mining Corp, the financing company in North America for Amsterdam-based Bitfury Group Ltd. Bitfury Group Ltd is one of the biggest manufactures of cryptocurrency mining equipment.
Tai states that smaller bitcoin miners will soon be unprofitable, only top 5 to 10 of the largest mining companies will survive and be profitable.
Mining Expenses for Small Miners vs Large Enterprises
The small miners tend to buy hardware from other manufacturers. whereas the large enterprises can place an enormous order for parts and even buy electricity at a discount price.
“We can buy silicon in large quantities and commit to the electricity grid in chunk sizes. We have the cash to make the deposits and set them up.” The company is in discussions to connect to a nuclear power plant that’s going online in about 18 months, Tai said.
Numerous small miners are trying to cut costs by relocating to locations like Springfield, Missouri. Because there they will be able to save due to cheap rates of workspace for miners nearly $1 per square foot.
Also, the electricity prices vary from $3224 and more than $9000 to mine a bitcoin, depending on the state, as reported by Crescent Electric Supply Company’s estimates. This may not be comfortable for the smaller bitcoin miners and might affect their earnings.
The only way smaller miners will be profitable if the bitcoin prices will rise. Startups and small mining companies are hoping that the price will go higher this year and are counting on that.
What do you think about this ? will the bitcoin price go up and they will be profitable? let us know in the comment below.