Mining Industry Threatened; Profitability in Critical Levels

A lot has been said these days about the market plummeting and the focus is shifted now to the trading side of the market. Bitcoin, Ethereum, Bitcoin Cash and all the main cryptocurrencies have taken a good hit in its change values. But there is another face to this crisis that is often forgotten. The mining side of the crypto world. Yes, mining is also affected by the price crisis. If prices hit lower levels, it could also endanger the operativity of the different networks on different scales, depending on the specific cryptocurrency being mined.
This should not affect the hobby miner that has an ASIC or a GPU mining rig only for himself, but the threat is real for companies that have invested heavily in big mining operations having optimist estimations about prices. Earlier this year, a study calculated the cost to mine a bitcoin in every country of the world, as reported here. According to that study, mining is already unprofitable in some areas around the globe. But that study only considered the price of the power needed to mine the said bitcoin.
What about the price of the equipment used to mine the cryptocurrency? If we only center on bitcoin mining, the signature miner is Bitmain’s Antminer s9, and its price is roughly about 3,500 dollars. With this price, the ROI (Return On Investment) time is absurdly long for new businesses. So, most likely, we will be seeing a decrease in mining investments for the time being. Also, cloud mining contracts could be declared null by companies like Hashflare and Genesis Mining if the trend continues and cryptocurrencies hit record lows.
With all this being said, it is unlikely that network operativity would be at risk. There is already a great mining infrastructure in countries like China, where mining even with these costs is still profitable. Bitmain has its enclave there, with thousands of ASIC in their own mining farms. In any case, it an issue to keep an eye on in the near future.

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