Amidst a Bitcoin Halving event that is about to change the face of the mining industry. This may lead to centralization. Jug Conner, head of derivatives at Bitfinex, estimates that making it more difficult for miners to make a profit could force smaller mining companies to leave the competition. Only large companies with more capital remain.
However, Conner said the changes also represent an opportunity to improve innovation and efficiency within the industry. Miners may explore new areas with cheaper energy resources. Or invest in more efficient mining technology to maintain profits.
In addition, miners may invest in developing more cost-effective tools. And you can use your resources to upgrade your mining rig even further.
The downside to this is that transaction fees may increase if block mining rewards decrease. Miners will increasingly rely on transaction fees as a source of income. High fees may also reduce the attractiveness of small Bitcoin transactions.
The negative consequences of miners leaving the market is network security, with Conner stating that “a significant and long-term decline in hash rates could undermine confidence in the security of the Bitcoin network, which could impact the price and adoption rate of Bitcoin.” currency.”
But in the short term, the rise in Bitcoin prices was driven by a decrease in the speed of creation of new currencies. This may compensate for the reduced block mining rewards. As a result, miners are still concerned about securing the network.
source: Encryption briefing
“Reader. Infuriatingly humble coffee enthusiast. Future teen idol. Tv nerd. Explorer. Organizer. Twitter aficionado. Evil music fanatic.”