The Big Halving: Bitcoin Miners Prepare for Token Rewards Reduction
The next Bitcoin (BTC) halving, the most anticipated quadrennial event in the cryptocurrency space that has the potential to drive the maiden digital currency price to new heights, could pose more troubles to Bitcoin miners than the previous ones.
According to mining experts, Bitcoin miners would face more challenges in the upcoming April 2024 halving, given the high electricity costs and debt burden.
“Nearly half of the miners will suffer given they have less efficient mining operations with higher costs,” Jaran Mellerud, crypto-mining analyst at Hashrate Index, told Bloomberg.
Every once in four years, the reward for successfully mining a Bitcoin block is cut in half. The event, dubbed halving, reduces inflationary pressure on the cryptocurrency. Currently, the rewards per block are 6.25BTC ($188,944 at press time), and the next halving in the second quarter of 2024 will further reduce it to 3.125BTC ($94472 at press time) per block.
Bitcoin halvings in the past have been followed by major bull runs, the latest was in 2020 with a 560% surge in the price of the world’s biggest cryptocurrency. As a result, many investors welcome the event.
So far, Bitcoin miners have been making up the loss of mining rewards following the halving, by technological advancements that have improved the mining efficiency. However, the report noted that the upcoming halving “risks sounding the death knell” for certain miners.
According to Mellerud, the break-even electricity cost for the primary mining machine is predicted to drop from 12 cents/kWh to 6 cents/kWh after the halving. However, 40% of miners have operating costs exceeding the threshold.
“Miners with operating costs above 8 cents per kilowatt-hour will struggle to stay afloat, as will
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