Although this happens regularly every 4 years, bitcoin miners seem to be taken by surprise every time.
Bitcoin miners just hit a wall. As of July 9, the rewards of letting your computers chug away as bitcoin mining machines fell through the roof as the cryptocurrency cut them by 50%.
Although earlier you could have mined 25 bitcoins (around $16,000) every 10 minutes, after this move, you will have to fight for mining just 12.5 bitcoins.
This measure, which is an attempt to curb inflation, automatically kicks in every years. With a growing number of miners and evolving CPU speeds, the measure is necessary. This isn’t really surprising.
Seriously bitcoin miners will have to streamline their operations and have to work twice as hard to get the same results. Companies who have yet to streamline their operations will have little room to maneuver. In the worst case they might even be forced to close shop.
Earlier this year in May, KnCMiner having warned on its impending profit profile, was forced to take cover under Chapter 11. Looks like only those miners who will keep costs to a minimum with their low-powered computers and low operating costs, will survive.
Given that this scenario repeats itself every four years, you would expect the industry to not be taken by surprise. But no, that appears not to be the case. Although it has yet to go mainstream, many more people have started mining bitcoins and not all of them seem to have factored in reward cuts.
Hopefully by 2020, bitcoin miners are again not taken by surprise. Miners will have to again trim costs them or hope they can make some $$$ from transaction fees.