Bitcoin investors speculate the upcoming halving could send prices skyrocketing to $90,000 or higher.
To the operators of high-speed computers used to mine for bitcoin, the halving looks more like a doubling — of costs.
In a new report, the crypto-focused research firm TradeBlock estimates the average cost to mine a single bitcoin (BTC) could jump to $12,525 after the halving, expected in May. That’s nearly double the average cost of $6,851 now. Essentially, miners will have to run twice the number of computations, with a corresponding increase in electricity usage, to get the same amount of bitcoin they’re getting now.
The estimated cost is also well above the current market price of about $10,300, providing an illustration of how the halving could turn the crypto-mining industry’s profitability upside-down if market prices don't rise.
The halving was programmed into bitcoin’s original network programming as a a bulwark against inflation when the cryptocurrency was created just over a decade ago. The idea was a predictable and ever-slowing pace of new supply of the cryptocurrency would help to stabilize bitcoin's purchasing power — a contrast with government-backed currencies that can often be printed at will by human central bankers. Read More