Shenyu, co-founder of F2Pool, world’s sixth largest crypto mining pool based in China, posted a Weibo unveiling the critical crypto prices below which miners have to be shut down for lack of profitability.
The price of bitcoin, the dominant cryptocurrency, has struggled throughout 2018, declining by almost 70 per cent since the start of the year.
Over the past two days, a widespread bearish correction in the crypto market was seen. Bitcoin, Ether, Litecoin and other cryptos all declined on substantial volume, with BTC below $6,600 again and ETH below $250.
Bitcoin mining is the upstream industry of bitcoin. Each time a mathematical problem is solved, new bitcoins will be released. Due to the instability of the crypto market, earnings from mining decline accompanied by the drop in crypto price and increase of mining difficulty (the more mining power the network has, the harder it is to mine cryptos).
Together with the price drop, there was also a drop in bitcoin hashrate, falling from an all-time high of 62EH/s to the current 49.54EH/s, according to blockchain.com. It reflects that bitcoin hashrate is positively correlated with its price in the short term, while the bitcoin hashrate is actually growing at a high speed in the long run.
During the crypto massive drop, Shenyu, co-founder of F2Pool, posted a picture on his Weibo, a Twitter-like platform, unveiling the threshold prices below which miners are unable to make profits, with a comment reading
“It’s impossible to shut down miners.”
Calculated by the current mining difficulty on September 6 with electricity price at 0.45 yuan (6.6 cents) per kW/h, the cost to mine a bitcoin for an Antminer S9 is 30,262 yuan ($4,424). That means, once bitcoin price drops below $4,424, miners counting on S9 will hardly make ends meet but have to shut down their operation to stop from further loss.
It is notable that some older models with low power efficiency like Antminer S7 and Avalon A741 have fallen far behind. It costs an S7 79,258 yuan (almost $11,600) to mine a bitcoin, far exceeding the current bitcoin price at $6,551 as of press time.
Different miners have varied threshold prices. The lower the cost is, the more miners could profit. Judging from the picture, in terms of bitcoin mining, T2 performs the best, followed by Avalon A841 and Antminer S9 among the 7 listed bitcoin miners.
A3 for SC mining, D3 for Dash mining, and B3 for BTM mining are all losing money based on the current prices of the three altcoins.
Upon this, many Chinese miners left comments below the Weibo, saying
“Roger that. (the BTC price) could drop 20,000 yuan more.”
“I will NEVER ever shut down my mining machines.”