Bitcoin’s Halving Event Could Lead to Offline Hash Rate
A new research report from Galaxy Digital suggests that as Bitcoin’s highly anticipated halving event approaches, up to 20% of the cryptocurrency’s current hash rate could go offline. This reduction is expected to impact eight specific ASIC mining machine models, resulting in a drop in the network’s overall hash rate.
Galaxy Digital’s Projections
According to Galaxy Digital’s mining analysts, by the end of 2023, over 70% of Bitcoin’s hash rate was being generated by just eight ASIC miner models. These models are susceptible to fluctuations in Bitcoin price and transaction fees, which means that between 15% to 20% of the hash rate produced by these models could go offline after the halving event.
In a less severe scenario, older and less efficient models such as Bitmain’s S9, Canaan’s A1066, and MicroBT’s M32 may face near-complete shutdowns. On the other hand, newer and highly efficient models like the Antminer S19 and S19J Pro are expected to withstand the halving. However, some models may still go offline in regions with high operational expenses.
Galaxy Digital cautions that business decisions by miners could affect these outcomes. Some miners may choose custom firmware to boost efficiency or sell their machines to miners with cheaper power. Miners using newer S19 models might face challenges and consider sales or upgrades.
Bitcoin Miners Investing Ahead of Halving
Despite the upcoming challenges, the anticipation of the halving has led to significant investments in mining infrastructure. Companies like Riot Platforms and Bitfarms have expanded their mining capabilities through substantial equipment purchases.
Riot Platforms recently invested $290.5 million in purchasing 66,560 MicroBT machines, with an option to acquire even more. Bitfarms plans to enhance its mining fleet by adding 36,000 Bitmain T21 miners. These strategic moves aim to improve efficiency, reduce production costs, and expand hash rate capacity.
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