The price of Bitcoin and Mining have a certain correlation. It is therefore theoretically expected that a price drop will lead to a decrease in mining or hash performance – but this is not the case.
Bitcoin’s Hashrate seems to show that the mining industry is looking for a stronger position at a time when profitability is not very high due to a low Bitcoin price that has dropped below $6,000. While the Bitcoin price has been falling since early 2018, the hash rate seems to be rising steadily.
Is there any correlation between mining and Ethereum code at all?
When we look at the Ethereum code in its present form, the correlation seems somewhat confusing. The current hashrate of the Ethereum code network is 35,366,943,171 GH/s. The current hashrate of the Bitcoin network is 35,366,943,171 GH/s.
If the entire network consists of S9 miners from Bitmain, special ASIC miners designed exclusively for crypto mining, this would mean a number of 252,621,022 asics, each consuming 1.4 kilowatts or a total of 3,536,694.
The costs of mining in terms of energy consumption and the resulting environmental damage were made public to a large extent. Places such as Iceland and China have become a hub for mining. The current energy consumption is estimated at the consumption of the whole of Singapore, a country with 5.6 million inhabitants.
The average global cost of mining a Bitcoin is between $5,700 and $5,800 at an average energy price of $0.08 per kilowatt hour.
What explains the growth of the Bitcoin trader?
Most of Bitcoin trader mining power comes from China, where electricity is cheaper than average and could explain why the hash rate is increasing even as the average return approaches the cost curve. However, the Chinese government wants to take action against domestic mining and has already begun to impose harsh penalties.
Regardless of profitability and even the risks of government intervention, Bitcoin Mining is still profitable today. Mining generates an annual turnover of around 6.3 billion dollars at current market prices, but costs only around 2.3 billion dollars. This means that the Bitcoin price could theoretically be reduced by half and that profits could still be made in some zones. In addition, when mining coins, one should not forget that many speculate that the price will rise again in the long run. So if you have enough liquidity, you may well miss out on such a “crypto winter”.