The well-known Bitcoin popularizer Andreas Antonopoulos, in his recent question and answer session, explained why Bitcoin mining would never be unprofitable for miners.
According to Antonopolus, miners today work around the clock around the world, and some of them are more efficient than others. When the price of bitcoin falls or the number of miners increases, then mining is the least effective miner becomes unprofitable.
When the least profitable equipment is turned off, and the complexity of the network changes, it will make effective mining installations even more profitable. This will lead to the connection of more miners, and then the whole cycle will be repeated again.
When the complexity decreases, their mining equipment becomes more profitable, perhaps so profitable that the equipment turned off becomes profitable again, so they turn it on again. This will increase the hashrate, so the next time it is recalculated, mining will again be less profitable.
According to Andreas, economic theory shows that price always tends to zero return. Of course, in practice this never happens, and the price always fluctuates above and below the break-even point.
On average, it will fluctuate around zero, and most miners will work almost break-even … Price (on average) will never make mining unprofitable. Leaving inefficient miners will make the rest profitable.
Andreas emphasizes this because it is this economic factor, combined with recalculation of complexity, that helps protect the Bitcoin network . If mining ever becomes unprofitable everywhere, then everything will simply collapse. Fortunately, concludes Antonopoulos, this should never happen.
Publication date 10/04/2019
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