Bitcoin mining rewards will be halved in mid-July. Will the price of Bitcoin rise or fall?

7月11日this year, the Bitcoin block mining reward will be halved again. What impact will this have on the value of Bitcoin? Many people are worried that mining is becoming less and less profitable, but some experts have different views.

Most bitcoin users believe that the mining reward halving in July this year will have a negative impact on the value of the cryptocurrency. They generally believe that the bitcoin mining industry is no longer profitable, whether for large mining companies or individual miners, and some say that individual miners will face more pressure.

Bitcoin cloud mining platform Genesis Mining has responded to the incident as follows:

We know that this reward halving will be a hot topic, but we cannot make any speculations about something that has not yet happened. The nature of cryptocurrency is changeable. But imagine that when the mining reward is halved, the demand for Bitcoin will increase, and the value of Bitcoin will also increase. This is definitely not an isolated case.

If everything else remains the same except the reward halving, then mining may indeed become unprofitable. But as I said before, this industry is inherently volatile, so the impact of the reward halving is unknown. The value of Bitcoin may go up or down, and miners may choose not to mine, or they may continue to mine.

Concerns about the mining industry

Tim Akinbo, CEO of Nigerian software service provider TimbaObjects, said:

This halving is different from the previous ones. In the past, most people mined for fun, but now mining has become a business model and investment method.

He said that most mining companies are currently making little money, and if the price of Bitcoin remains unchanged before July 11, many mining companies will lose money.

For these mining companies to continue operating, the price of Bitcoin must rise by 100%, which is impossible. For example, if your company is not profitable, and you embezzle 50% of the profits, most mining companies will face the situation of closing down. However, this situation may not lead to a decrease in the security of Bitcoin, because it will accelerate the decentralization of the mining process.

Bitcoin has appreciated

Some believe that the reward halving will not cause any loss.

Imagine that before, one Bitcoin was worth $200, so why did miners mine? Because the reward for a new block was 25 Bitcoins, they were still profitable. Today, the value of Bitcoin has doubled, so miners will still be able to make a profit in the future. There may be other variables in the future, but I think with the value of Bitcoin today, miners will not lose money because of the halving of rewards.

Low power consumption may solve the crisis

Bitbank, a Chinese mining company, also has a positive attitude towards the halving of rewards. It is confident in the long-term development of the Bitcoin mining industry and believes that the halving of rewards will not affect profitability.

Bitbank currently plans to crowdfund 3500BTC to build a mining factory, and promises investors that this investment will have a 100% return rate.

Virgilio Lizardo J, head of international operations, said the company had long anticipated the variable of halving the reward.

Bitbank and sister company BW have teamed up to launch a ‘unique 14nm mining machine’ with a total hashrate of 30 petahash.

The 14nm mining machine can ensure the highest performance with the lowest power consumption and has a service life of up to two years.

Bitcoin transactions still available

Before July 11, it remains to be seen whether Akibo’s prediction of large mining companies facing bankruptcy will be true or not.

If the increase in the value of Bitcoin is less than the amount of the reward halving, and you happen to be a large mining company, then you should start to worry about the reward halving. But for ordinary users, there is almost no impact. As long as the mining equipment is still there, Bitcoin transactions will continue to be valid.

The successful crowdfunding of Bitbank indicates that the development of China’s Bitcoin mining industry is a good remedy for the reward halving crisis.

We actively observe the development of the Bitcoin industry in other parts of China and help local governments formulate Bitcoin market rules. Due to these factors, Bitbank is confident in the long-term development of the Bitcoin industry in China.

Original article: http://cointelegraph.com/news/china-bitcoin-mining-growth-may-help-overcome-worries-over-711-halving
Author: Olusegun Ogundeji Translator: Wendy