A sudden decline in Bitcoin and cryptocurrency mining took place through 2018 for two key reasons. First of all, rising costs for energy and expensive mining equipment made the set up of mining operations far more costly than they used to be. Secondly and more importantly though, the decline in the value of Bitcoin set mining profits crashing. Because a single Bitcoin is worth far less than it used to be just one year ago, the action of mining went from a profitable one, to a financial drain and thus, people had to stop.
The full scale of this decline was frankly huge and saw a number of major mining operations close down - Bitcoin mining farms became too expensive to operate leaving miners out of pocket.
According to new reports however, there seems to have been a sudden uptake in the number of people buying cryptocurrency mining equipment. As people become more bullish about Bitcoin and as more investors are starting to see the light at the end of the (very long) tunnel, it seems that people could turn to Bitcoin mining once again.
According to Coindesk, miners in China are starting to make the most of buying second hand (used) Bitcoin mining equipment and are striking deals with hydroelectric power plants. A marriage of the two - cheap mining equipment and cheap power through an abundant water supply means that, with overheads down, Bitcoin mining could start to drive profits once again. With these hydroelectric power stations in operation, miners can expect to pay around $0.037 per kilowatt hour (kWh) for electricity, meaning they will be paying very little for the power required to run the mining rigs. One company behind this drive, Hashage, envisions a new wave of Bitcoin mining in China.
“Xun Zheng, the company’s CEO, told CoinDesk that over the past month the firm has been talking to individual miners and larger mining farms with a total demand of more than 1 million slots for deploying mining chips. According to Zheng, individual miners on average are looking to host 1,000 to 3,000 units of mining equipment each, while larger farms are eyeing at a larger scale of over tens of thousands of machines.”
“He added although the exact electricity costs with local hydropower stations won’t be finalized until the end of March, miners have already started looking for resources and negotiating deals with mining farms before the season comes so that they have enough time to ship equipment to the mountains and set them up.”
Like many, Hashage have foreseen a new push towards Bitcoin mining, something that could prove to be lucrative in the instance that Bitcoin starts to move back up to that highly sought after $20,000.00 value. If Bitcoin does hit $20k, those miners will be very happy indeed.