Bitcoin 'Halving' Spurs Exodus of Old US Mining Computers Abroad (bloomberg.com) 48
An anonymous reader shares a report: About 6,000 older Bitcoin mining machines in the US will soon be idled and sent to a warehouse in Colorado Springs where they'll be refreshed and resold to buyers overseas looking to profit from mining in lower-cost environs. Wholesaler SunnySide Digital operates the 35,000 square-foot facility taking in the equipment from a mining client. The outdated machines are among several hundred-thousand it expects to receive and refurbish around a major quadrennial update in the Bitcoin blockchain.
Known as the halving, the late April event will slash the reward that's the main revenue stream for miners, who will try to lessen the impact by upgrading to the latest and most efficient technology. With electricity the biggest expense, mining companies including publicly traded giants Marathon Digital Holdings and Riot Platforms need to lower usage costs to maintain a positive margin. Their older computers may still bring a profit, just not likely in the US.
Some 600,000 S19 series computers, which account for a majority of machines currently in use, are moving out of the US mostly to Africa and South America, according to an estimate by Ethan Vera, chief operating officer at crypto-mining services and logistics provider Luxor Technology in Seattle. In Bitcoin mining, specialized machines are used to validate transactions on the blockchain and earn operators a fixed token reward. Anonymous Bitcoin creator Satoshi Nakamoto baked in the once-every-four-years halving to maintain the hard cap of 21 million tokens. Next month's event is the fourth since 2012 and the reward will drop to 3.125 Bitcoin from 6.25 now.
Known as the halving, the late April event will slash the reward that's the main revenue stream for miners, who will try to lessen the impact by upgrading to the latest and most efficient technology. With electricity the biggest expense, mining companies including publicly traded giants Marathon Digital Holdings and Riot Platforms need to lower usage costs to maintain a positive margin. Their older computers may still bring a profit, just not likely in the US.
Some 600,000 S19 series computers, which account for a majority of machines currently in use, are moving out of the US mostly to Africa and South America, according to an estimate by Ethan Vera, chief operating officer at crypto-mining services and logistics provider Luxor Technology in Seattle. In Bitcoin mining, specialized machines are used to validate transactions on the blockchain and earn operators a fixed token reward. Anonymous Bitcoin creator Satoshi Nakamoto baked in the once-every-four-years halving to maintain the hard cap of 21 million tokens. Next month's event is the fourth since 2012 and the reward will drop to 3.125 Bitcoin from 6.25 now.
Not economically viable? (Score:2)
Re:Not economically viable? (Score:4, Informative)
Unless it dies first, it will eventually become impossible to mine Bitcoin at all. There's a built-in ceiling of 21 million, after which mining operations will not yield any Bitcoins at all (actually, because of the way the Bitcoin algorithms round, production of Bitcoin should come to a complete halt when there is just short of 21 million).
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Re:Not economically viable? (Score:5, Informative)
Re: (Score:3, Interesting)
With the lower proof of work competition, because mining no longer pays out, computational requirements will drop, which will make it that much easier for any large mining outfit to do that 51% attack, making bitcoin effectively worthless.
Re: Not economically viable? (Score:2)
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This won't work unless a majority of the network agrees to change to that fork of the code.
I'd imagine the prospect of throwing their mining hardware into the dumpster might provide the necessary motivation.
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You mean the network that profits from mining coins will have to vote to make it possible to continue mining coins?
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The intention of the original bitcoin design was that the miners would transition from minting new coins to earning their money from transaction fees. Bitcoin was also envisioned as an actual currency, routinely used to pay for things though.
It's unlikely all the miners would agree, so bitcoin would fork (again). One fork would dispense with the cap and I think that would probably crash its value.
Since the number of transactions is likely to go down with increased transaction fees, the number of miners in t
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The miners will still benefit by mining blocks even when the reward of newly minted BTC per block is 0 after all new BTC coins have been mined. The miners will get the transaction fees only at that point. Currently they get 6.25 BTC + transaction fees. Sometime next month they'll get 3.12 BTC + transaction fees. For example, the most recent block mined included 0.35+ BTC from all the fees of the 1,900+ transactions which were included in the block.
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Well, it is the original crapto, what can one expect?
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Miner revenue consists of (1) the "coinbase" per-block reward, and (2) fees per transaction.
Transactions fees are growing and eventually will be the only source of miner revenue.
Depending on the demand for on-chain transactions, some miners may have to shutdown. The
remaining miners will then get more revenue. Supply and demand.
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Re:Not economically viable? (Score:5, Informative)
When the reward is halved then the value (generally) doubles.
There aren't going to be half as many Bitcoins in circulation, just half as many being mined. The value of the coins already out in the wild do not magically double in value because new ones are now being produced at half the rate.
That doesn't stop people from misunderstanding this concept and creating a pump and dump situation every time there's a halving, though.
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Their plan is to make this new money be adopted by the masses, so they start it off with a low price, then gradually increase it, by virtue of them just pulling numbers out of thin air for its value, until it catches the attention of the masses
It got even more shady than that. A lot of BTC was bought using USDT and despite the original claim that it was a stablecoin where every single USDT was backed by $1 USD it turned out that wasn't the case and those running USDT were just minting the shit out of USDT to go on a buying spree of BTC to whack the price up.
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There is the issue or market manipulation where the value can vary radically based on current sentiment but this is a separate thing. The base value of the coin is determined by how much it costs to mine it and it tends to hover around that when not being manipulated. When it deviates from that then you will get more or less mining which in turn changes the difficultly and such.
BTC, like any security, is worth exactly what someone will pay for it at any given time, no more and no less. The underlying fundamentals of a security, like how much it costs to mine, or the P/E Ratio in the example of stocks, CAN influence what people are willing to pay for a security, but just as often doesn't. This isn't necessarily "market manipulation" as you put it, it's just unsophisticated market actors buying and selling based on what they think makes sense, which may or may not be remotely connec
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The worth of mining a coin is directly tied to the reward.
No it's not. The worth of bitcoin has very little to do with the cost of mining it beyond a loose conceptual correlation. You don't need to take my word for it, just look at the value of bitcoin. It hasn't doubled in any of the previous halving events.
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You're wrong and I wish people like you were smarter. The worth of mining a coin is directly tied to the reward..
The dumb one is you. The worth of mining a coin is directly tied to the value of BTC which is directly linked to how much hype the whales and influencers can generate around the currency.
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Two choices:
1) transaction fees.
2) most of the miners will stop, and an interested party will dominate the pool and do whatever they like.
This is the problem with tying the security of your system to the amount of electricity used. It's either expensive or insecure.
Expensive or insecure. (Score:2)
>> expensive or insecure.
It is both expensive and insecure.
And very wasteful.
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It isn't like Bitcoin will suffer from inflation.
You're absolutely right - it's actually suffering from overinflation of its value.
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Sorry, but Bitcoin is a scam.
There, FTFY.
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Sorry, but Bitcoin is here to stay. It is well on the way to breaking six digits, and when the halving hits, it only will make the currency more valuable, likely $120,000 by May
After the previous halving BTC dropped in value for a few months and when it recovered it didn't 2x.
Re:Not economically viable? (Score:4, Informative)
The transaction costs go up.
Mining is an ambiguous term - it refers to both the act of "creating" new coins, as well as the act of "locking in the blockchain". That's the purpose of mining - the computers take in the transactions to add to the blockchain, do the computations and lock it in. And as a reward for this, they earn coins, but they also get the coins from the transactions added.
When it becomes impossible to mine new coins, the miners get rewarded by transaction costs. Thus, if it's unprofitable, they are supposed to turn off the miners which reduces the computation power of the network, increasing the chance of the remaining miners to get in (the difficulty scales with the computing power - the more computing power you throw at it, the harder it gets to mine). This is why a new block is added every 10 minutes - the network scales to the power available.
Of course, adding transactions to a new block means if you want to et your block confirmed, you need to get it in the block, and the only way to do that is to increase your transaction fee you pay since the miners only pick the transactions offering the most to add to the blockchain.
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Why waste cards on BTC when they could be generating poetry and twelve fingered art?
GPUs haven't been used to mine Bitcoin in quite awhile. It's all just dedicated hardware that becomes ewaste the moment the cost of the electricity it consumes exceeds the value of the Bitcoin it mines. That's why you sometimes hear stories about authorities finding these things hooked up to stolen power, because it's always profitable to mine when someone else is paying for the juice.
Grandparent was cracking a joke (Score:2)
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Bitcoin is mined on ASICs - chips that can do SHA256 really efficiently but nothing else.
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Isn't it still a type of processor that can run embarrassingly parallel code in a fraction of the time compared to CPUs?
I'm not saying it's impossible but it was my understanding that bitcoin ASICs have only enough ram to store what's needed to mine bitcoin.
https://www.techradar.com/news... [techradar.com]
"How much SRAM you include in a chip is a decision based on cost vs performance. A bigger SRAM pool requires a higher upfront cost, but less trips to the DRAM (which is the typical, slower, cheaper memory you might find on a motherboard or as a stick slotted into the motherboard of a desktop PC) so it pays for itself in the long run."
A real company? (Score:3)
No power to the people I take it (Score:2)
So I take it that a town with barely any power supply gets new power plant, but all the energy goes into these rigs, and the bitcoin to someone abroad. Sorry, no power for you.
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You could actually learn about the economics of mining instead.
You'd be happier on several axes.
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You could actually learn about the economics of mining instead.
You'd be happier on several axes.
Why, does it mean that mining BTC uses less power? Oh wait, no it doesn't. In fact the halving serves to make the power requirements to mint a coin even higher than the insane amount of energy it already needs.
Oh noes! (Score:2)
Bitcoin mining should be illegal (Score:3, Insightful)
Forget what Bitcoin is used for, the 'production' should be banned anywhere that gives even the slightest shit about the environment or rational allocation of energy production.