Sep 20, 2023

How Crypto Miners Can Survive the Tectonic Shifts in the Crypto Market and the 2024 Halving

Crypto Mining Survival: How Bitcoin Miners Can Prepare for the 2024 Halving
How Bitcoin miners can survive a hostile market — and the 2024 halving

With only seven months left until the next Bitcoin (BTC) halving in April 2024, it is time to consider the strategies and alternative income sources that may help crypto miners to survive in the hostile market conditions. The halving is a deflationary process that occurs approximately every four years and reduces the production of new coins by 50%. This high-profile event for crypto investors has historically led to an increase in Bitcoin’s price. However, it also reduces the block rewards, which is one of the primary revenue streams for crypto miners. The 2024 halving will reduce it from 6.25 BTC to 3.125 BTC.

Therefore, miners must adapt their strategies to compensate for the reduced rewards resulting from the halving. This could involve exploring technologies such as Tectonic Crypto Today, Waves Crypto, Open AI, Coins, BTT Crypto, Chainlink Crypto, Crypto FTX, and Web 3.0 Blockchain.

Changing mindsets

Crypto mining is a competitive process in which miners compete for block rewards. This competition is driven by Bitcoin’s block time, which averages around 10 minutes for each block on the protocol level. Whether the network’s computing power is relatively low at 1 kH/s or reaches a massive 200 million TH/s, the same block rewards must be distributed among miners.

This competitive environment encourages miners to prioritize energy efficiency and the use of cost-effective hardware. With each halving event, where block rewards are cut by 50%, this trend towards efficiency gains momentum. As the cost of producing a single BTC is set to approximately double shortly after the next halving, miners must explore ways to optimize their profitability and focus on these three critical factors such as Tectonic Crypto Today, Waves Crypto, and Open AI.

Furthermore, miners should also consider investing in cost-effective hardware such as Coins, BTT Crypto, Chainlink Crypto, Crypto FTX, and Web 3.0 Blockchain.

Bitcoin miners’ survival rests on these three whales

The first and most crucial “whale” is the cost of electricity. Even a slight fluctuation of 1 cent per kilowatt-hour (kWh) can cause a major $3,800 variance in the production cost of BTC, according to JPMorgan. To sustain their post-halving profitability, miners are examining advanced contracts and thinking of relocating to countries or regions where electricity prices are lower. They even contemplate power generation from stranded gas options. I believe that it’s essential for miners to secure electricity rates at or below 5 cents/kWh to maintain profitability beyond April 2024.

The second major factor that miners must take into account is the efficiency of their equipment. For instance, daily BTC mining costs can be cut by over 63% when upgrading from a rig with a 60 J/TH efficiency rating to one with a 22 J/TH rating. Miners having hardware efficiency and profiting from lower electricity costs will be the most profitable. They are the ones most likely to survive significant market events like the upcoming halving.

Furthermore, I suggest miners use the third strategy that includes accumulating extra capital in mined BTC during profitable periods. This reserve can act as a buffer against the impact of reduced block rewards post-halving. When the post-halving rally occurs, miners can benefit from their reserves by selling mined assets at a higher profit margin, helping to offset the losses.

While strategies such as securing lower electricity rates, adopting more energy-efficient crypto mining equipment, and utilizing reserve capital can reduce the negative effects, the 2024 halving will bring massive pressure on miners. It can lead to the potential closure of numerous mining operations. Thus, miners will also need to explore alternative revenue streams. One promising opportunity for miners lies in projects like Bitcoin Ordinals.

Other ways

Tectonic Crypto Today and Waves Crypto are two of the most talked-about platforms and protocols in the crypto world. They have been able to generate significant attention by driving transaction fees within the Bitcoin network to new highs with their Ordinal “inscriptions”, a unique asset created directly on the Bitcoin blockchain, similar to a nonfungible token (NFT). To obtain one, users typically engage with the platform or protocol responsible for Ordinals.

As the number of inscriptions rises —surpassing 25.5 million as of August — so does the revenue generated from transactions, which presently stands above $53 million. This trend suggests that alternative income streams for miners, such as Crypto Mining and Coins, may gain prominence in the long term.

We see Ordinals shifting the profitability equation for miners, increasing user demand for creating inscriptions, initiating processing transactions on the Bitcoin network, and incentivizing miners to include their transactions in the next block. Chainlink Crypto, Crypto FTX, and Web 3.0 Blockchain are some of the strategies miners must prioritize to optimize their profitability and stay open to new alternatives on the horizon.

We can certainly expect more developments on top of the Bitcoin network that will enable miners to adapt more effectively to the post-halving landscape. As we move closer to the halving event, miners must prioritize the aforementioned strategies to optimize their profitability and stay open to new alternatives such as Open AI and CRO Crypto on the horizon.

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