Bitcoin Mining: How Energy Prices Are Impacting Mining
cryptolove last edited by Reward
Both 2018 and 2019 have been well known in the space, and for a lot of reasons. The incredible crypto highs and depressing crypto lows are just a few of the reasons.
One thing that has remained consistent through the years though, is the fall in the profitability of Bitcoin mining. The whole mining industry nearly stopped in 2018 because of multiple different factors.
So with this all in mind, we’re going to look at whether Bitcoin will ever recover in the next decade, specifically, 2020.
The factors we need to consider are as follows:
- Rising energy prices
- Falling Bitcoin prices
- Rising hardware prices
We’re going to look at these factors over a few articles so make sure to keep an eye out for the rest!
For now, let’s take a look at the energy prices…
The cost of energy across the globe has increased. This is thanks to inflation as well as through increased demand for fuel and power.
The fuel industry is driven by supply and demand so naturally, fuel prices will always go up. With this in mind, so do the bills we all have to pay to receive power.
When adding up all the Bitcoin mining profits, the biggest thing to consider is how much it will cost to actually mine the cryptocurrency. The cost comes through the sheer amount of energy needed to mine blocks on the Bitcoin blockchain, the process uses a lot of power and therefore contributes to higher energy bills. As the price of these bills rises, profit margins shrink, so, you end up paying more money to mine less Bitcoin and thus, your reward is reduced. Sadly, through 2020 energy bills are only expected to rise and so therefore we can’t see any legitimate solution here that will help make mining profitable again.