The looming migration of Bitcoin’s computational force, or hashrate, could mean a dip down as far as 30% into a chasm of unprofitability for many miners, following the forecasted Bitcoin halving event to take place in April 2024. This was the sentiment echoing in a recent Twitter Spaces event featuring experts and hosted by CoinDesk during their 2023 Mining Week.
Lucas Pipes, of B. Riley Financial, put forth an estimated drop of Bitcoin’s hashrate between 15% to 30%. Likewise, Colin Harper of Luxor Mining also warned of a 20% lurch forward towards a potential drop.
The cogs and gears of this intricate process spin into motion roughly every four years during what we commonly christen as the ‘halving event.’ This ‘halving’ slices the Bitcoin reward miners hoard into two, ultimately governing the complex supply economics inherent within the blockchain. On the calendar for the next halving, the present reward of 6.25 BTC per successfully mined block will dwindle to an ensuing 3.125 BTC.
With the halving effect, comes a consequential doubling of the cost to hit the jackpot of a successfully mined block. Unless the price of Bitcoin undergoes significant bull movements, the grand stage is prepared for the exit of miners operating on thin margins of profitability, sequentially driving down the aggregate hashrates for the network.
To try to keep their heads above the tide, miners are eyeing a potential salvation strategy – bringing new-generation machines into the fold. These machines boast of lower power requirements, rendering a more efficient mining operation. Operational expenses of miners are largely made up of power costs, thus, moderating such costs can make a difference between sinking or floating when the next halving hits.
Although the upshot of these efficiency steps is a rising hashrate as a result of an influx of new machines, the journey is worth noting. Machine efficiency seems to be learning from history and doubling approximately every half-decade. Consequently, the crypto arena braces for the next big halving event, all while miners are mapping out their game plan amidst an environment synthesized with shaky promise and precarious uncertainty. Reality, however, will reveal itself when the echoes of these forecasts face the litmus test of time and market dynamics.
Source: Coindesk
