With bitcoin split in half, miners around the world were forced to make adjustments to adapt. The half will see a doubling of the bitcoin production cost (BTC) in one night, but luckily, the cryptocurrency has reacted positively to the upcoming event.
While almost everyone in the crypto environment is optimistic about this incident, for the obvious reason, the path to Bitcoin price is unknown twice, especially given the coronavirus pandemic and the massive unemployment wave that has begun. Although this can be a stressful event for Bitcoin holders, there is more than that for those who have done Bitcoin mining work: miners.
For bitcoin miners in countries with subsidized capabilities like Venezuela or low electricity prices like China, where most of the bitcoin network's fragmentation power is concentrated, increased production costs can be controlled. Even those who have average prices but are equipped with the latest mining equipment are prepared. But for those who have higher power brackets, for example, in Europe, their operations can largely depend on how Bitcoin drops by half compared to the price.
European miners prepare to cut half
So, this is how Europe’s miners prepare, as electricity prices are among the highest in the world, to cut them in half.
Some may actually have to close if the price does not go their own way, but miners have been aware of it for half a long time and have been able to prepare for this event. According to Jake Stoute, a member of the dGen Foundation, a Berlin-based research institution that has recently employed several key European players in the industry, the miners have had the opportunity to improve:
“The great thing about Bitcoin Halving is that it is a well-known income shock. Miners must have been preparing for this day since the last half several years ago. It is important to upgrade to the latest machines, the latest infrastructure, buy cheaper power supplies and build with the right combination.” Miners prepare well for all bitcoin price-related scenarios. “
Although the most advanced equipment and infrastructure is very important, it will be very important. Youssef Mansouri, co-founder and CEO of French mining company Sesterce, told Cointelegraph:
“It is very difficult to predict what will happen after the half, it seems very logical to prepare the worst scenario, try to negotiate electrical contracts and upgrade the equipment. That's what we've been doing at Sesterce for several months on hold.”
Cheap equipment upgrades and partnerships are the first steps for miners in Europe, but there are other solutions that can prepare them for volatility, which can be cut in half, including hedging and loan strategies. According to Anthony Trenchesch, co-founder of Nexo Digital, this is already happening in the region. He told Cointelleg:
“There are more and more financial tools available for managing digital assets, and with it a set of services that specifically meet the needs of miners. Miners are an important part of Nexo's customer base, and many choose a standard credit limit to support our encryption to maintain and expand their business or conduct Deposit on newly minted BTC. “
The future of mining in Europe
Although miners in Europe are doing their best to deal with cut in half, this accident brings long-term mining capability. Can activity be maintained in Europe? Will the joint site be the norm? Or can companies and authorities in the region start competing with other countries where mining is a complete industry? Al-Mansouri believes that Europe can be competitive:
“We see that more and more European countries understand mineral extraction and the main problems of sovereignty. We have big power plants in Europe that lead to numerous losses and huge revenue losses, and we must make sure that we offset the losses in the mining and energy industries so that Europe can succeed in the long run.” “
Excess energy and renewable energy may be the solution to the European mining industry, and that's what is really happening, according to Wet Gibbs, a leading mining podcast program, Hashr8. But this may be the answer in non-bitcoin other mining forms. Gibbs said to Quintilage:
Despite not paying much attention today, some parts of Europe are still good for mining. Iceland and Sweden appear to be the most popular sites. I heard that there are German producers of electricity that have begun to produce more energy, just as they do in the United States of America.