With Bitcoin’s price dropping below $7,000 this week, attention has turned towards Bitcoin miners and their hardware to determine when profitability will be lost. Already, a number of older model miners have lost their profitability, with only a few newer pieces of equipment still in the green.
The Bitcoin mining hardware break-even price determines when the cost of mining Bitcoin is equal to the reward for mining on the blockchain. The information was provided by f2pool and was based on current network difficulty and $0.050/kWh electricity prices.
The #BTC price dropped below $7000 today
Hopefully we see a recovery soon. Here's an updated BTC Mining Hardware Break-Even Price chart for your convenience, don't forget you can use our Mobile App to get this data in real-time! pic.twitter.com/NOHZFdZgb7
— f2pool (@f2pool_official) December 17, 2019
According to f2pool, some older miners, such as Whatsminer M3, AvalonA741, and Ebit E9+, all fell out of profitability in the $9,000 – $10,000 range. However, the recent drop below $7,000 has put at least seven different pieces of hardware in danger as their break-even point sits in the $6,000s.
Dangers to the Bitcoin Network
Bitcoin mining is intrinsically linked to the health of the network. The higher the hashrate of the blockchain, indicating more mining effort, the more secure the network is. This often will indicate a higher price as well.
However, when mining became unprofitable, miners often leave en masse to seek out more profitable alternatives, which can lead to a substantial drop in the hash rate and an evacuation of the miners, conversely sparking a drop in price.
However, despite the most recent dips, the hashrate of Bitcoin has not shown much damage. In fact, in the last 24 hours, it has shown a small rebound in price. More so, the mining difficulty, which usually drops when miners leave the network, has been steadily growing throughout the whole of 2019.
Miners Must Adapt
While many models of mining hardware are in danger of becoming unprofitable under the circumstances explained by f2pool, there are ways and means for large mining operations to remain profitable.
Recently, a new generation of hardware was released, which has been largely utilized up by the top miners and mining pools. This new generation is said to be four times more efficient than Bitmain’s Antminer S9 models, which were a staple of Bitcoin mining for the past couple of years.
More so, Bitcoin mining is always seeking cheaper and often greener sources of energy. Large mining organizations have moved into areas like the Sichuan province in China, where electricity is abundant and less expensive, as it is based on hydroelectric power, helping to increase the profitability for miners.