Reuters: Bitcoin miners fight for survival as new halving approaches

posted over 2 years ago
In the world of Bitcoin, it is not central banks that add new money to the system, but rather miners which are awarded fresh bitcoins in return for processing blocks of the latest bitcoin transactions. Miners do serves two purposes: they record and verify bitcoin transactions and - because they earn new bitcoins for the work they do - steadily increase the currency in circulation.

Mining is slow and intensive, reaping a gradual reward in the same way that minerals such as gold are mined from the ground.But because of halving, the reward for miners will be slashed in half as it was written into bitcoin's code when it was invented.

From around 1700 GMT on 09 July instead of 25 bitcoins there will be just 12.5 mined every 10 minutes. That means only the mining companies with the leanest operations will survive the ensuing profit hit.

Even despite the fact that the halving was expected, and that the price of bitcoin has risen, it has already claimed one casualty: Sweden's KnCMiner filed for bankruptcy at the end of May, citing the hit to its profits that the reward cut would bring. The Swedish firm, like everybody else, had faced competition from miners in China, which can mine bitcoins cheaper.
Tags: bitcoin, opinion