Bitcoin miners have apparently begun to succumb to the savage 2018 price drops, resulting in older mining equipment being sold and scrapped in bulk. Pictures and video have emerged on social media of mining equipment mountains as operators throw out unwanted equipment. Each model of Bitcoin miner has a ‘shutdown’ price, the point where the operating costs of the machine are higher than the profit it can generate by mining Bitcoin. It seems that older miners have finally started to reach that point, with dramatic results.
Too Bad to be True?
Misinformation is often a problem in the fast-moving world of cryptocurrency, and the images of discarded ASIC miners piled on top of each other have not yet been verified as being recently taken. It might even be from the damage suffered after huge floods in Sichaun province last year that wiped out a number of Bitcoin mines. Mining farms also often upgrade their equipment, which could explain the pictures. Senior Market Analyst at eToro Mati Greenspan did however recently note that the Bitcoin hash rate was the lowest it had been since August, saying that “it seems clear that some miners are shutting down their rigs in face of lower BTC prices.”
BRUTAL: this is what’s happening now in a China based mining site …. ?? pic.twitter.com/gcN4lVTyBt
— Dovey Wan ? (@DoveyWan) November 20, 2018
Norwegian Miners Take Double Hit
The sharp drop in Bitcoin price has been coupled with perhaps worse news for miners in Norway, who found out Wednesday that from January 2019 their electricity subsidies will end, meaning they have to pay the normal tax rate on their electricity. Norwegian mining firm Northern Bitcoin, who recently opened operations in a former metal mine, state that the average cost of mining one Bitcoin in the country is currently $7,700, meaning that from next year miners will have a tough decision to make whether they continue to operate at a loss or turn the machines off until the price picks up. Given recent developments, they could be waiting some time…