Mining the flagship cryptocurrency Bitcoin has reportedly become easier and more profitable because of the current crackdown of crypto mining farms in China.
More than half of the hashrate, or the processing power of the Bitcoin network, dropped since the market peak in May as a result of the Chinese government’s mining restriction, but this could be beneficial to other crypto miners, according to a report from CNBC.
Kevin Zhang, vice president of crypto mining firm Foundry, said that when a large number of Bitcoin miners go offline, the share of other miners in the network increases.
Bitcoin mining becomes easier
He explained that mining becomes less difficult when hashrate falls off the network. The hashrate that remains active also receives more for their proportional share of the mining rewards.
“All bitcoin miners share in the same economics and are mining on the same network, so miners both public and private will see the uplift in revenue,” Zhang said.
Assuming there are no changes in power costs, Zhang estimates that the revenue of miners using the latest-generation Bitmain miner is now $29 per day compared to $22 per day before the change in the global hashrate.
He added that while miners’ income fluctuates with the changing prices of the top crypto, mining revenues dropped by only 17% from the numbers in April, when the price of Bitcoin soared to its all-time high above $63,000.
Miners could see more profits
According to Whit Gibbs, the CEO and founder of Bitcoin mining service provider Compass, his firm expect miners to be approximately 35% more profitable.
Darin Feinstein, the founder and executive chairman of Blockcap, which operates one of the biggest Bitcoin mining operations in North America, commented that the shutting down of Bitcoin mines in China stands to benefit miners in other regions.
“We are expecting a revenue and profit increase for the foreseeable future. This was an unexpected gift to the network, not just on revenues but on decentralization and sustainable energy metrics.”
Generally, more than 90% of Bitcoin mining capacity in China could shut down amid the government’s intensified crackdown on cryptocurrency mining.