Three days after bitcoin rewards halved from 12.5 BTC to 6.25 BTC, reports reveal that the network’s harshrate had fallen by almost 30%. While this might signal a significant shift in the distribution of shares in the crypto mining market, it, however, does not necessarily connote a precursor to doomsday.
Way before the halving event, the bitcoin mining community had envisaged a drastic change brought about by the shrinking of income from mining operations. On the one hand, operators with access to the latest mining rigs and cheap electricity expected this development to give them more leverage in the bitcoin mining scene. On the other, those relying on old mining equipment understood that halving the block rewards would render their operations unprofitable. Days after bitcoin rewards halved, these projections have become the new realities even as some miners, as a result of unprofitability, have begun to temporarily shut down or switch to more viable mineable coins.
As reported by Coindesk, although “the price has recovered a major portion of the lost ground, the cryptocurrency’s hashrate (the total computing power dedicated to mining blocks on the blockchain) has declined to 98 exahashes (EH/s) – that’s down 27% from the high of 135 EH/s observed on Monday.”
The 30% decline in bitcoin’s hashrate indicates that some miners have scaled back or diverted their hashing power to either Bitcoin Cash or Bitcoin SV. However, note that both cryptocurrencies also underwent halvings of their own over a month ago. And it is unlikely that they will offer much in terms of a financial escape from the alteration of the supply cycle of Bitcoin.
Contrary to the disruption of the bitcoin mining landscape, the price of the digital asset has impressed. Following the halving of rewards, the price experienced an upsurge that partly erased the effects of bitcoin’s pre-halving dump. And although this price upturn has, to an extent, cushioned the impact of the halving, experts believe that miners with old equipment will still find it difficult to run a profitable mining business, even if prices rise to $14,000. Therefore, it is only a matter of time before miners, who fall under this category, begin to opt for other crypto income-generating alternatives.
Possible Alternatives For A Steady Source Of Crypto Income
Apart from mining, there are several other avenues to earn crypto. One of the most prominent ways requires crypto holders to constantly engage with the crypto market. Trading is a viable but complex process of identifying price movements and executing transactions based on such forecasts. Better still, people looking for a simpler and fun way to make money with the crypto market can opt for gamified crypto trading platforms.
A prime example is AlphaPlay, a smart contract-enabled p2p price prediction platform, where players can bet on the 5-minutes movements of crypto prices and double their earnings instantly.
Users can take advantage of the platform’s ongoing token sale and Alpha Gambling loyalty programs to increase their earning power. The token sale, which runs until August 8, ALPHA ERC 20 token are receiving 6% of the platform’s turnover, while members of the platform’s affiliate program are earning 4% of the turnover from their referrals. The remaining 90% is up for grabs for all users as the prizes. Besides, all new users have access to a $1,000 demo account to test the site.
For miners who would rather remain in the crypto mining market, it is advisable to opt for more profitable coins. This decision might require them to change their mining equipment, except they decide to remain in the SHA 256 mining market. The goal is to either reduce the cost of mining or maintain the cost while increasing the mining output. As such, the cost of electricity will certainly come to play in the decision-making process.
No Permanent Damage To The Bitcoin Network
Zach Resnick, a managing partner at Unbounded Capital, had earlier argued that the halving will have a devastating effect on the bitcoin network and likely culminate in its demise. While data shows a 30% fall in the hashrate, there is no sign of an impending doomsday. Over the years, bitcoin has accrued record-breaking hashing power. Therefore, the recent slash in its hashrate is insignificant to the outlook of the network’s security. Moreover, the emergence of new pooling infrastructures ensures a balance in the distribution of the blockchain’s mining shares. Once the price of the digital asset and its block difficulty maintains an equilibrium, we expect the hashrate to recover.