{"id":8641,"date":"2022-02-22T08:29:26","date_gmt":"2022-02-22T08:29:26","guid":{"rendered":"http:\/\/egrowonline.com\/?p=8641"},"modified":"2022-02-22T08:29:26","modified_gmt":"2022-02-22T08:29:26","slug":"cryptoverse-bitcoin-could-be-laid-low-by-miners-malady","status":"publish","type":"post","link":"http:\/\/egrowonline.com\/?p=8641","title":{"rendered":"Cryptoverse: Bitcoin could be laid low by miners&#8217; malady"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div>\n<p data-testid=\"paragraph-0\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">Feb 22 (Reuters) &#8211; Bitcoin miners are feeling the heat &#8211; and the pain&#8217;s rippling downstream to pressure prices.<\/p>\n<p data-testid=\"paragraph-1\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">The cryptocurrency&#8217;s spectacular rally in 2021 drew thousands of entrants into mining, or producing new coin. As a result the hashrate, or combined computational power used by bitcoin miners globally, has roughly quadrupled over the past six months to blow past 200 million &#8220;terahashes&#8221; per second.<\/p>\n<p data-testid=\"paragraph-2\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">But what&#8217;s that got to do with the price of bitcoin?<\/p>\n<div class=\"registration-prompt__container___bYuCJ7 registration-prompt__inline___lE4_O9 article-body__element___vulnXJ article-body__inline-registration-prompt___OCH-j6\">\n<div class=\"registration-prompt__text-content___3mCDaQ\">\n<h5 class=\"Text__text___2vZwzq Text__white___cSohpe Text__medium___3mY4FC Text__heading_5___Zn3DqM Heading__base___3qCIA2 Heading__heading_5___ruN8eD registration-prompt__heading___2LgQ-c\">Register now for FREE unlimited access to Reuters.com<\/h5>\n<p><button class=\"Button__button___3B9OxT Button__secondary___1qNGNf Button__round___SR4lqT TextButton__container___2ipwLP registration-prompt__button-text___eFmPbk\" type=\"button\"><\/p>\n<p><span class=\"Text__text___2vZwzq Text__inherit-color___1Jv4Eu Text__bold___2pIB3c Text__default___1ZhUwy TextButton__medium___1HuzMG\">Register<\/span><\/p>\n<p><\/button><\/div>\n<\/div>\n<p data-testid=\"paragraph-3\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">A rising hashrate makes it becomes harder for miners to earn coin and cover their costs of hardware, electricity and staff &#8211; so many are more likely to sell, rather than hold, their newly minted cryptocurrency, exerting a bearish force on the market.<\/p>\n<p data-testid=\"paragraph-4\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">&#8220;Running costs are a major factor in miners&#8217; decision to hold or sell newly acquired coins. They are the first and most natural sellers in the crypto space and so definitely impact prices,&#8221; said Justin d&#8217;Anethan, institutional sales director at crypto financial services firm Amber Group.<\/p>\n<p data-testid=\"paragraph-5\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">The total value of coins held in miners&#8217; wallets has fallen to around $75 billion from $114 billion at the start of November, as their profitability has been squeezed by the rising hashrate as well as falling prices, according to Oslo-based crypto research firm Arcane Research.<\/p>\n<p data-testid=\"paragraph-6\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">Miners have been transferring more coins to exchanges than adding to reserves, according to crypto industry analytics firms, a sign of selling or intent to sell.<\/p>\n<p data-testid=\"paragraph-7\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">Such flows are adding to pressures facing bitcoin , whose drift towards the mainstream has seen it caught up in a selloff in global markets driven by tensions on the Ukraine border and the Federal Reserve&#8217;s policy tightening.<\/p>\n<p data-testid=\"paragraph-8\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">The world&#8217;s dominant cryptocurrency is trading at about $37,400, which is 40% below its Nov. 10 high of $62,000.<\/p>\n<p data-testid=\"paragraph-9\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">WHAT IT COSTS<\/p>\n<p data-testid=\"paragraph-10\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">Bitcoin mining, in simple terms, is the process by which a network of computers checks and validates a block of transactions that then get added to the blockchain. Miners get rewarded for completing a block.<\/p>\n<p data-testid=\"paragraph-11\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">It&#8217;s an expensive business, though, requiring not just sophisticated and fast &#8220;rigs&#8221; costing upwards of $10,000, but also a huge amount of power. And it&#8217;s getting pricier.<\/p>\n<p data-testid=\"paragraph-12\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">The seven-day average of total mining cost per transaction validated has fallen to $176.8 from a record $235.57 hit in May last year, data from blockchain.com shows.<\/p>\n<p data-testid=\"paragraph-13\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">&#8220;As more miners join the network, each individually earns fewer bitcoin. This is because network difficulty increases in order to slow the issuance of new bitcoin,&#8221; said Joe Burnett, analyst at infrastructure and mining firm Blockware Solutions.<\/p>\n<p data-testid=\"paragraph-14\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">Waning mining profitability is also hitting the broader market because some institutional investors, who are unable or unwilling to invest directly in cryptocurrencies, instead buy shares of listed miners or ETFs that track miners as an alternative way of gaining access to the young industry.<\/p>\n<p data-testid=\"paragraph-15\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">Shares of U.S.-listed crypto miners Marathon Digital Holdings <a target=\"_blank\" href=\"https:\/\/www.reuters.com\/companies\/MARA.O\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__medium___3mY4FC Text__large___1NuIuP Link__underline_default___1RrRWa\" rel=\"noopener\">(MARA.O)<\/a> and Riot Blockchain <a target=\"_blank\" href=\"https:\/\/www.reuters.com\/companies\/RIOT.O\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__medium___3mY4FC Text__large___1NuIuP Link__underline_default___1RrRWa\" rel=\"noopener\">(RIOT.O)<\/a> have plunged 66% and 52% respectively since early November.<\/p>\n<p data-testid=\"paragraph-16\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">The Valkyrie Bitcoin Miners ETF <a target=\"_blank\" href=\"https:\/\/www.reuters.com\/companies\/WGMI.O\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__medium___3mY4FC Text__large___1NuIuP Link__underline_default___1RrRWa\" rel=\"noopener\">(WGMI.O)<\/a> is meanwhile trading at a roughly 5% discount to its net asset value since the fund&#8217;s launch in early February, and the Viridi Clean Energy Crypto-Mining &amp; Semiconductor ETF has lost 23% since the beginning of the year.<\/p>\n<p data-testid=\"paragraph-17\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">THE LAST BITCOIN<\/p>\n<p data-testid=\"paragraph-18\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">Some of the pressures on miners flow from bitcoin&#8217;s inherent structure. The decentralised blockchain was created anonymously with a final limit of 21 million coins, of which nearly 19 million has already been minted.<\/p>\n<p data-testid=\"paragraph-19\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">It takes around 10 minutes to mine one block and the reward for miners &#8211; who currently get 6.25 bitcoin per block &#8211; is halved about every four years.<\/p>\n<p data-testid=\"paragraph-20\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">&#8220;There could be one miner or a million, it doesn&#8217;t change anything. There&#8217;s only one block and a set number of bitcoins issued,&#8221; said d&#8217;Anethan at Amber Group.<\/p>\n<p data-testid=\"paragraph-21\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">A final note: don&#8217;t lose sleep fretting about what will happen when the last bitcoin is mined &#8211; that&#8217;s not expected until the middle of the next century, 2140 to be exact.<\/p>\n<div class=\"registration-prompt__container___bYuCJ7 registration-prompt__inline___lE4_O9 article-body__element___vulnXJ\">\n<div class=\"registration-prompt__text-content___3mCDaQ\">\n<h5 class=\"Text__text___2vZwzq Text__white___cSohpe Text__medium___3mY4FC Text__heading_5___Zn3DqM Heading__base___3qCIA2 Heading__heading_5___ruN8eD registration-prompt__heading___2LgQ-c\">Register now for FREE unlimited access to Reuters.com<\/h5>\n<p><button class=\"Button__button___3B9OxT Button__secondary___1qNGNf Button__round___SR4lqT TextButton__container___2ipwLP registration-prompt__button-text___eFmPbk\" type=\"button\"><\/p>\n<p><span class=\"Text__text___2vZwzq Text__inherit-color___1Jv4Eu Text__bold___2pIB3c Text__default___1ZhUwy TextButton__medium___1HuzMG\">Register<\/span><\/p>\n<p><\/button><\/div>\n<\/div>\n<p><span class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__default___1ZhUwy sign-off__text___1kMQGj\">Reporting by Lisa Mattackal and Medha Singh in Bengaluru; Additional reporting by Alun John in Hong Kong and Vidya Ranganathan in Singapore; Editing by Vidya Ranganathan and Pravin Char<\/span><\/p>\n<p class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__regular___3orWU3 Text__large___1NuIuP Body__base___3K85eE Body__large_body___1_XkH1 article-body__element___vulnXJ\">Our Standards: <a target=\"_blank\" href=\"https:\/\/www.thomsonreuters.com\/en\/about-us\/trust-principles.html\" class=\"Text__text___2vZwzq Text__dark-grey___1T5z1- Text__medium___3mY4FC Text__large___1NuIuP Link__underline_default___1RrRWa\" rel=\"noopener\">The Thomson Reuters Trust Principles.<\/a><\/p>\n<\/div>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.reuters.com\/markets\/europe\/cryptoverse-bitcoin-could-be-laid-low-by-miners-malady-2022-02-22\/\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Feb 22 (Reuters) &#8211; Bitcoin miners are feeling the heat &#8211; and the pain&#8217;s rippling downstream to pressure prices. The cryptocurrency&#8217;s spectacular rally in 2021 drew thousands of entrants into mining, or producing new coin. As a result the hashrate, or combined computational power used by bitcoin miners globally, has roughly quadrupled over the past [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":8642,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[37],"tags":[50,4916,4837,5440,521],"class_list":["post-8641","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bitcoin","tag-bitcoin","tag-cryptoverse","tag-laid","tag-malady","tag-miners"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"http:\/\/egrowonline.com\/wp-content\/uploads\/2022\/02\/OXI44UUFUBOOBJGVTYCNM4IIBI.jpg","_links":{"self":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts\/8641","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8641"}],"version-history":[{"count":1,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts\/8641\/revisions"}],"predecessor-version":[{"id":8643,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts\/8641\/revisions\/8643"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/media\/8642"}],"wp:attachment":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8641"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8641"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8641"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}