The Bitcoin protocol is designed to give the miners, or at least their effective proof-of-work, a certain amount of hashrate regardless of whether or not this miner performs real work. In order to encourage the utilization of this very small amount of hashrate, no economic incentives are given to mining and when this hashrate is exhausted, all new blocks will be discovered by the 'people who produced the hash' whose previous blocks were invalidated due to the lack of 'work.' In the system.
The mining industry is currently in a very precarious position, with the third halving expected to happen in just 43 days. Moreover, Bitcoin Cash (BCH) and Bitcoin SV (BSV) are going to have their supply cuts in early April, which means that their miners will flock to BTC to collect higher rewards. This will increase Bitcoin's mining difficulty, thus putting even more pressure on smaller players who are no longer able to break even.
We saw Bitcoin (BTC) miners capitulate on the eve of the 2011 bitcoin halving because they believed a very long, low price bubble would prevent a permanent shift in the value of the BTC price. It did not work, and prices have been pretty steady the past 9 years.While we have only the recent hard fork data to go on, we can expect Bitcoin ) miners to capitulate on the eve of the 4th halving in the near future. Because situation is same only big players will be able to survive.
. In a bid to increase the profit margin, many of them are increasing their hashing power and putting it under their own control. There is a dramatic implication of this situation. There will be fewer bitcoins in circulation for the foreseeable future. There will be fewer bitcoins to obtain for services as well as the higher cost of buying and storing such a large amount of cryptocurrency.Instead of competitors, governments will have more room to deal with the growing problem of the emergence of Bitcoin competitors in their territories
It appears that even major mining firms (not just individual miners) are not immune to the sell-off that was prompted by the COVID-19 pandemic. Shortly after 'Black Thursday,' U.S. company Digital Farms indefinitely stopped its cryptocurrency mining operations due to the sharp Bitcoin price drop.
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