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Hashr8OS CEO talks about the effects of Bitcoin halving on miners

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Cryptocurrency halving refers to a process that reduces the issuance rate of new coins. In May, Bitcoin is set to reduce the incoming supply of coins from mining by a staggering 50 percent. As a part of Bitcoin’s anti-inflationary properties, this is intended to up demand by lessening supply. As a result of these fundamentals, it is expected that the lowered supply will also lead to higher prices

The halving affects more than just the supply of Bitcoin. The recent rally past the $10,000 mark is an expected bull run in anticipation of the upcoming halving in May. Speaking on this matter, Whit Gibbs, Co-Founder and CEO of Hashr8OS expressed his thoughts about the halving in a recent Tales from the Crypt podcast

Effects on Bitcoin miners

Halving also means that the mining reward for BTC would also be slashed to half. It will reduce the block rewards that miners receive from the current number of 12.5 BTC to 6.25 BTC. The Bitcoin mining pools are dominated by ASICs these days; this has strengthened China’s position as the leading mining hub. The top 5 largest mining pools are also based out of China. Gibbs said:

“Right now, because of the logistics of it all, to get  ASICs from China to anywhere else in the world, takes quite a long time. Whereas the Chinese miners can get them quickly, so quickly, in fact, that they can actually buy them mine profitably and then sell them to the western world.”

About the Bitcoin mining ecosystem, and what happens following the Bitcoin halving, he said:

“When that reward gets cut in half, you’ve got to think that a lot of people’s production costs are going to double.”

He noted that miners that have access to low-cost energy would be better than having access to buying miners at a lower cost. He added:

“It’s not a great situation for people who are FOMO-ing into S17+ miners right now because they’re going to be in not a good place depending on the cost of power.”

Higher Hashrate Higher Security

Bitcoin’s hash rate is a good indicator of the network’s health. The higher the hash rate is, the less vulnerable the system is for a 51% attack. Bitcoin’s network gets more secure with time since its hash rate continues to hit fresh all-time highs. A recent coinbase blog post read:

“After two halvings in the past that limited rewards to miners, mining power (aka hashrate) have recently reached all-time highs. Or in other words, as Bitcoin’s supply has edged toward its 21 million limit, network security has increased in parallel (log).”

With more miners competing for the block reward, commonly leading to higher mining difficulty, Gibbs pointed out that the lifecycle of the ASIC miners is likely to decrease:

“I think that we’re looking at more of a two-year life cycle from here on with ASICs.”

About the increasing energy demands, Gibbs stressed the importance of off the grid energy solutions and their benefits. He added:

“If you can, you can filter the natural gas through a generator that’s going to then produce Bitcoin it’s good for the environment. I would say that 100% of the time. Bitcoin in general, I think is indifferent for the environment.”

Anna Larsen
Anna Larsen has been a Crypto enthusiast since 2016. Fascinated by the technology and its usecases she decided to pursue a career in content creation related to this space. The journey has been exciting ever since.

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