Will the surge in computing power affect the payback period of mining?

Time flies and we have entered August unknowingly. Let's take a look at the changes in the mining circle. The most recent one is the Litecoin block reduction on August 5, which reduced the block reward from 25 LTC to 12.5 LTC. It is reported that the Litecoin reduction will not affect the price. The block reduction has little impact on its price.

At the same time, good news came from the Middle East: the Middle East authorities approved cryptocurrency mining, allowed international miners to engage in cryptocurrency mining, and raised the mining electricity fee to 7 cents per kilowatt-hour.

The mining machine market is in short supply, and two mining machine manufacturers have increased their production. Bitmain will cooperate with TSMC to increase production to 10,000 pieces per month. Canaan Creative, a mining machine manufacturer, has resubmitted its IPO application. In 2018, they submitted an IPO in Hong Kong but were rejected. Recently, they have resubmitted their IPO application to the United States.

Increased production of mining machines affects the growth of computing power

Now is the flood season in China, and a large number of mining machines are being transported to mine, because miners can get good mining income under the conditions of cheap electricity and soaring coin prices. Even the Antminer S9 can greatly shorten the mining cycle under the current mining difficulty.

Due to the sharp rise in the price of coins, the mining market has soared, causing a large number of miners and financial institutions to deploy mining and pour into the mining industry. The market is rising, and to the surprise of mining machine manufacturers, all manufacturers have no mining machine inventory. Whether it is a new machine or a second-hand mining machine that was shut down before, they are all put on the shelves to operate mining in this wave of mining dividends. As a large number of mining machines are pouring into mining, the block computing power is also rising.

The most important factors in mining are the cost of mining machines, mining computing power, block rewards, electricity costs, etc. The current mining difficulty of the entire network is 9.01T. There are still 7 days and 13 hours before the difficulty adjustment. It is expected that the next difficulty will be increased to 9.31T, an increase of 3.28%. When the mining difficulty increases, the coin price will also increase synchronously. If the increase in the coin price cannot keep up with the increase in the mining difficulty, the payback period of miners will be extended.

What is uncontrollable for miners is the difficulty of mining computing power. After the computing power of digital currency increases, if the price of the currency falls, the low-computing mining machines will be eliminated first. The mining machines with high computing power have lower mining costs, stronger risk resistance, and longer mining cycles.

Mining is a fixed investment, choose the right mining time

After the flood season in October and November each year, electricity bills increase, and mining costs increase as many low-computing mining machines will be eliminated. Mining machines are customized products and are updated very quickly. After the flood season ends, mining machines will be transferred to overseas mines with lower electricity prices.