Hashpower doubles in bear market, Breakeven Skyrockets cost
Cryptocurrency investors have had a difficult year, to say the least, with the collective value of all crypto assets down more than 80% # 39 arc of eight months. Despite this violent sale, miners have still increased their investment in this nascent asset class.
Recently tweeted by Sam Doctor, strategist and quantitative analyst of Fundstrat Global Advisor, the hashrate (hashpower) of the Bitcoin network has doubled since May, from ~ 28 quadrillion hashes per second (EH / s) to about 57 EH / s how it is today.
Despite $ BTC bearish market, hashpower doubled from May to 57 EH / s – Even with upgrades to existing equipment, it implies almost 1 GW of new energy consumption compared to 5.2 GW in May & # 39; 18. Breakeven now $ 7300 ($ 5300 BE cash) against $ 6000 in May – Mining becomes FCF -ive @fundstrat #Crypto pic.twitter.com/pTTWJWlrz0
– Sam Doctor (@ fundstratQuant) 14 September 2018
As such, by analysis of the doctor, in which he cited the energy consumption of the Bitcoin network, the cost of ASIC and other, the cost of a draw for the extraction of a BTC is now $ 7,300 compared to $ 6,000 in May 2018. Elaborating, the doctor wrote:
$BTC bear the market, hashpower doubled from May to 57 EH / s – Even with upgrades to existing equipment, it implies almost 1 GW of new power consumption vs. 5.2GW in May & # 39; Breakeven now $ 7300 ($ 5300 BE cash) against $ 6000 in May – Mining becomes FCF.
Thomas Lee, known crypto proposer and head of Fundstrat's research, supported the analyst's claims, retweeting his research and leaving his 56.8k followers know that the figures were valid.
Updated estimates of full pay cost (now $ 7300 vs. $ 6000 previously) for #btc based on the quant model developed by our quantum data scientist @ fundstratQuant  #bitcoin @BITMAINtech https://t.co/Ya6CIYtsWA
– Thomas Lee (@fundstrat) September 15, 2018
For those who are not in the cycle, Lee, who appeared on several occasions on CNBC's crypto-related segments to express his bullish sentiment, said that the cost of mining draws proved to be a strong support line and a potential fund difficult for the crypt more important asset.
In addition, the infamous Bitcoin ull permeapon also noted that Bitcoin can (and often does) trade 2.5 times on the rise its draw extraction cost, which was apparently seen during the bull's run. last year and during the ten-year history of Bitcoin.
Keeping this in mind, it is clear that the Fundstrat executive still sees upward the encryption that has long been dubbed "digital gold".
"They are happy to accumulate"
As reported by Ethereum World News in August, the rapid rise of the hashrate was attributed to the large miners of the companies that expanded their operations, even among domestic miners, domestic miners who abandoned their mining facilities because of low or no profitability. Marco Streng, CEO of Genesis Mining, noted:
There are still large expansions that happen, especially from more efficient miners. The expansion is so great that it compensated for the abandonment of not very efficient miners.
And as pointed out by David Sapper, the Blockbid COO, a less well-known cryptographic exchange, indicates that these companies are willing to continue extracting Bitcoin, even if profitability has been exploited. Sapper elaborated, noting:
The increase in the rate of hashes means that people are here for the long term because they are happy to accumulate only what they have, potentially even at a loss. At the same time, at the same time, sometimes they have to purify home and landfill (though).
This leads to a very interesting point, in which miners, operating in balance or a light / medium loss, are just keeping their machines to accumulate crypt for the long haul. This move suggests that while some companies may need to sell some crypts to cover costs, this long-term "HODL" approach may indicate that companies that support this space are expecting this sector to be successful in the long run.
Not only has the growing hashrate have financial implications, but also security implications. Conan O & # 39; Bitcoin, a promising cryptocurrency, stressed that a BTC confirmation today is as secure as eight confirmations exactly one year ago, or 33 confirmations two years ago.
Current Hash #bitcoin rate is at ~ 60 EH / s. To put this into perspective, 1 confirmation today is sure how 8 confirmations were a year ago or 33 confirmations two years ago. 🤔🔐👍
And although many would consider it irrelevant, it is important to note that the safety of blockchain will become an increasingly important topic of discussion as the cryptographic assets are adopted across the world.
Photo of Jonny Caspari on Unsplash