Bitcoin Forum

Looking at the hash rate chart on https://www.blockchain.com/charts/hash-rate  (https://www.blockchain.com/charts/hash-rate) you can see a huge drop right after this year's halvening - similar in % move to the drop which followed the nearly 50% price decline in March. While the March price drop was an unforeseen event, the halvening had been a known quantity for years in advance - and yet we still saw a huge drop in hashrate a few days after the reward switched to BTC 6.25. How does this make sense in the context of the supposed long-term horizon of most large-scale miners which (again presumably) try to utilize economies of scale - both in terms of equipment and time.

Are these sharp declines that follow a very predictable event revealing that the mining market is in fact dominated by lots of smaller players which are operating on the edge of insolvency? Or is mining mostly an investment gig with a ~4 year time horizon until the next halvening?

Just thinking out loud but would love to hear what the rest of you think...

The difference between a BTC price drop and a reward halving is that the halving is "permanent" (until it halves again). BTC prices go down , they go up. To offset the impact of halving to a miner, requires a price doubling, a efficiency improvement , or an electricity cost reduction.

Well with the 1/2 ing I was running 28 s9's. knowing they would be shut down when the 1/2 ing came.

They were all paid for and were 2 to 3 years old.  Why not run them until the bitter end so to speak.  they are about 315 th.

I purchased 170th of new gear due to arrive a few days before the 1/2 ing.

The 1/2 ing came I shut down 28 of the s9's. and put up the new gear.

Net hash loss of 145th. But the new gear is 37watt per th vs 83 watts a th.

Down the road I will get more new gear.

One last thing prior to the 1/2ing I had 1800 th total gear of which about 1480 was new 37 to 50 watt gear.

I will bide my time and wait for a chance to buy more gear.  I still have 21 of the s9's in storage just incase of a price spike.

we are over 10,100 and the diff is going to drop 10% on thurs.  Almost makes the s9's worth turning back on.

Highly doubting this and for two reasons.

One is the small players dominating the market, of course, it will be the question of what means a "small" player, 100Th, 1Ph, 10Ph? 10 Ph at these prices means either ~700 S9 worth 70k now or 700k a year ago,  or 100 S19 worth 300k, would this be the entry-level for small players, then what is the level for the medium or large players? They might have a serious piece of the current hash rate but I doubt they are even close to "dominating" the market.

The second one is the "insolvency" part. Again, this might be true for large scale farming, there are probably quite a few cases when they took loans for their gear but "insolvency" for small farms? Nope, I don't see that as anything significative, most would have avoided taken loans and even if they would have tried taken that path I doubt they would have been able to settle one with their banks, it's a pain in the ass to take a loan or extend a credit line for us here for a business that has been operating for 15 years that has assets and stuff,  but for crypto mining? Neah, I can't imagine anything like this, this is where drilling for shale and bitcoin mining go their separate routes.

Thanks for sharing this!

This is an interesting point - about upgrading to new equipment just before the halvening - if a lot of miners are following the same pattern, this would pretty much explain a temporary drop which is followed by a new all-time high in hashing in a matter of weeks.