[ad_1]
Bitcoin (BTC), Cryptocurrency, Mining-As before reported on the part of EWN, the drop in the Bitcoin hash rate that accompanied the most recent drop in prices throughout the month of November raised a debate on the cause of the decrease in mining activity and the potential consequences.
Some Twitter users have indicated a clear abandonment of the cryptocurrency extraction, with a decrease in the valuation from $ 6500 to the recent value of $ 3500 (including almost $ 100 billion of market capitalization from all currencies) as a catalyst to unleash a mass exodus in the miners. Given the state of the cryptocurrency industry only a year ago, where mining rigs were in high demand and even established companies were jumping the ship to join the mania of mining, the end of 2018 saw a convincing change of attitude.
A video released last week, which shows hundreds of expensive unused mining facilities in a warehouse, sparked a ruckus in the cryptic community, with the belief that the footage should be edited in an attempt to publish more FUDs in an already low point for the market .
Most up-to-date footage – After BTC crashes blowing $ 4000 … miners in China are selling S7 for 5CNY per pound 🤣🤣🤣 pic.twitter.com/nV2Nk8lsLw
– Dovey Wan 🦖 (@DoveyWan) November 25, 2018
However, other stores have guaranteed their support to the incidence, giving some credit to the fact that the encryption industry is in decline with falling prices. In some ways, it's not a surprise. The cost of equipment in conjunction with the amount of electricity needed to extract at a profitable rate had inevitably led some once enterprising individuals to cut losses and exit the industry. But, as many have pointed out, there could also be a general shift from BTC to the moment, with the support of miners looking for more profitable currencies in the meantime until Bitcoin's prices show more promising prospects.
For the remaining miners, the decrease in competition means a greater possibility of coin rewards. However, for the cryptocurrency industry and the integrity of Bitcoin transactions, the reduced rate of data mining and hashing for the higher currency by market capitalization also increases the network risk for attacks. While the direction of the industry was, with regret of many fans of decentralization, a tendency towards consolidation before the recent decline in the hash rate, the most recent exodus led to a worsening.
According to data published by Bloomberg,
According to the Autonomous Research LLP, at least 100,000 individual miners were closed. Fundstrat Global Advisors LLC estimates that approximately 1.4 million servers have been disconnected from the beginning of September.
Malachia Salcido, head of Salcido Enterprises, one of the largest mining groups in North America, says the diminishing profitability of the mining crypt is shaking weak hands, but also causing a concentration of power for the few remaining,
"We are entering the stage where the market runs out, there will be relatively few operations that will come out of the other side."
The Bitcoin network is based on decentralization of extraction services. With hash rates falling 36% from their peak in August, and the difficulty in solving problems has decreased by 10%, the conglomerate mining networks are raking newly minted coins, but also an increased risk of a 51% attack . With the less variable platforms contributing to the hash rate of the network, the opportunity for a mining group or coalition of miners to gain control of the service also increases.
The controlling miners not only hold the lion's share of the new coins produced, but they could also influence the transaction landscape, with the possibility of inflating commissions, reversing specific transactions or blocking them all together.
Many within the industry have indicated Bitcoin ecosystem mutualism as sufficient to prevent such an attack. If the miners put a clamp on the transaction services, the overall usability of the platform plummets, which in turn leads to fewer transactions (and commissions) in addition to a declining rating for BTC. According to this logic, miners benefit as much from users as they are from maintaining a fair ecosystem.
However, only time will tell the effects of such consolidation of power. Without a true decentralization in the pocket, the charm of Bitcoin and similar cryptocurrencies begins to fall to that of the traditional fiat.
[ad_2]
Source link
