The negative situation in the cryptocurrency space gave rise to speculations about the emergence of a “deadly threat” over the Bitcoin mining market. When the hash rate in the Bitcoin network drop, the difficulty of mining decreases automatically. A “deadly threat” is technically called a situation in which the difficulty of mining does not have any time to adapt to lower hash rates. This slows down the mining of new blocks, reduces the profitability of miners and leads to a greater drop in the cryptocurrency rate.

At the moment, Bitmain’s Antminer S9 plays the main role in the Bitcoin mining market. At the same time, its break-even point is in the region of $ 7,500. As Primitive Ventures Founder Partner Dovey Wan notes, most of the community is unlikely to survive the new recession.

A drop below $ 7,500 would put mining profitability on the Antminer S9 at risk, she says. This type of hardware provides a huge share of hash rate. To confirm this, the crypto lady published on Twitter a post that contains data on the profitability using different hardware.

Tho daily hasheate chart is volatile and highly depending on statistical expectation, if $BTC price drops to sub $7500, there will be a significant impact on S9 miners S9 is now on the verge of shutting down, and whoever gets into mining post May on S9 can hardly get break even — Dovey 以德服人 Wan 🗝 🦖 (@DoveyWan) September 26, 2019

As she notes, “no much room left for S9 (it’s only the cost of electricity in the chart below, have to add up other operational costs too) comparing with M20s and S17.”

No much room left for S9 (it’s only the cost of electricity in the chart below, have to add up other operational cost too) comparing with M20s and S17 pic.twitter.com/I5GWaWa9jY — Dovey 以德服人 Wan 🗝 🦖 (@DoveyWan) September 26, 2019

But if the S9 leaves the market, then this will open up new possibilities, as the hash rate and network difficulty decreases as well.

Experts associate great hopes with the appearance of new models of mining hardware on the market which have a more balanced ratio of efficiency and energy consumption.

Interesting hardware is Bitmain’s Antminer S15 in terms of reducing energy costs. However, the price of this one is too high, and the payback period is more than 20 months.

Note the entry of such models as the M20s and S17 into the crypto market. But if the first machine is just shipped first few batches, the last is not shipped yet.

Is It Possible To Earn On Bitcoin Mining

The main expense of miners is electricity. Its estimate is at least 85% of all mining activity costs. The cheaper the electricity, the higher the profit of the miner. The price of one kW regarding the region and the type of hardware.

It is also necessary to pay the rent, the employees (security, administrators, etc.), hardware maintenance (tuning, cooling). At the same time, the miner can save value on the scale. According to experts, the cost of security and rental with a hundred and thousand machines are quite comparable. There are special services to calculate the profitability of a mining farm. Among them are WhatToMine, ASIC Trade, CryptoCompare.

However, the mining goes hand in hand with the operation of crypto exchanges and their liquidity. Therefore, the demand for this type of activity will continue to be relevant.

In general, the cryptocurrency rate plays one of the key roles in the expediency of their mining. With the current cost of Litecoin, network support brings only loss, as evidenced by the behavior of the miners of the second cryptocurrency. However, the demand for mining will still be in trend, since there is a need to ensure the liquidity of crypto exchanges.

As for Bitcoin, its mining is still profitable. Although there is an opinion that at the current difficulty of mining, the break-even point is near $ 7300. But all these calculations do not take into account the cost of hardware. Indeed, its payback takes at least a year.