Bitcoin Halving AMA Review: Dive Deep into Mining Strategies with Expert Insights You Can’t Afford to Miss!
With less than 30 days to the fourth Bitcoin halving, based on the current block generation speed, the event is expected to occur around April 20. Google Trends search data shows a sharp increase in the popularity of the keyword “Bitcoin Halving.” Clearly, nothing is drawing more attention from crypto market participants right now than the Bitcoin halving.
Miners, directly impacted by the halving event, must rethink their mining approaches to navigate the shifts induced by the halving. On March 21, 2024, at 8:00 PM EST, ViaBTC organized an online seminar on X(Twitter) under the theme “Bitcoin Halving: Mining Insights & Strategies.” The session featured a panel including Juliana May (Founder of Bmall), Tony Severino (Head of Research at NewsBTC), @HobbyistMiner, and Paphy Cai (CBDO of ViaBTC), who delved deeply into this subject.
This article organizes and condenses the wonderful shares of the guests from the seminar for the readers’ enjoyment.
Q1: Share your first encounter with BTC or mining, and whether you have experienced any major Bitcoin events.
Paphy:
In fact, my first encounter with mining was in 2018, and I have since experienced two Bitcoin halvings. That year, I bought a Whatsminer M3 mining rig and mined for about a year. Although I didn’t make a profit at the time, fortunately, I kept the BTC I mined and made a profit during the bull market in 2021. With the Bitcoin halving approaching in 2024, this will be the third halving event I experience.
Juliana:
I got involved in this industry around 2016 or 2017. From my observations, miners tend to sell their lower hashrate mining rigs as quickly as possible two months before every Bitcoin halving, to exchange for higher hashrate rigs. Therefore, based on my experience, it’s best for miners to prepare two months before the halving. For example, some of my partners and clients choose to upgrade to more efficient mining rigs like the ANTMINER S21.
@HobbyistMiner:
About three years ago, during the last cryptocurrency bear market, I began to really pay attention to Bitcoin, so I did not personally experience the Bitcoin halving event before. But the past few years have taught me one thing: that is to maintain long-term confidence in the cryptocurrency market. Pursuing short-term gains often leads to losses.
Q2: Discuss the concerns miners have about their earnings after the halving and how it affects their strategies.
Tony:
The Bitcoin halving is a major test of miners’ operational efficiency. Miners with access to cheap electricity, advanced mining rigs, and efficient operational models will gain a competitive edge. For smaller miners with limited capital, this will pose a significant challenge. For them, halving might mean having to temporarily pause operations, provided they can cover electricity and maintenance costs with the post-halving mining income. Less efficient miners might have no choice but to sell their rigs and exit the market competition.
Although halving is crucial for maintaining the diversity and healthy development of the Bitcoin ecosystem, it indeed exposes the harsh reality of the mining industry: only the most efficient and well-prepared miners can thrive in this field.
Q3: Is the effect of the halving and decreased mining earnings seen by you as a hurdle or as an opportunity for expansion?
@HobbyistMiner:
In my view, this is undoubtedly an opportunity. However, for home miners and even small-scale miners, this indeed poses a challenge, as their mining rewards will be halved. With electricity costs becoming the largest operational expense for both home and enterprise miners, the decrease in profits becomes even more severe under the pressure of high electricity bills.
This will be my first time experiencing a Bitcoin halving, and I hold some confidence in the value of Bitcoin being further unearthed, whether it’s in 6 months, 8 months, or 12 months, I believe it will bring profitability to miners. But I want to emphasize that most home miners use relatively older mining rig, so many miners with these rigs might choose to cease operations.
Q4: The deep impact of the halving on the worldwide Bitcoin mining ecosystem.
Tony:
I believe that this Bitcoin halving is significantly different from the past, especially in terms of its impact on the market and Bitcoin price. For the first time in history, we have Bitcoin ETFs, which have become a major force in the market. Currently, these Bitcoin spot ETFs institutions hold over 800,000 BTC, nearly 4% of the total Bitcoin supply.
The approval of Bitcoin spot ETFs has undoubtedly changed the game for Bitcoin. It has impacted the supply and demand dynamics of the market, and when buying demand significantly exceeds daily supply, we may witness astonishing price surges. Therefore, miners will benefit in the short term, especially against the backdrop of Bitcoin prices quickly reaching new historical highs.
Moreover, since the popularity of Bitcoin, the balance on exchanges has been continuously declining, whereas it had been on an upward trend before. Hence, we have indeed witnessed a tightening in market liquidity supply. It is this scenario that could make Bitcoin mining more attractive to all participants.
Q5: As mining economics change, could transaction fees become a major operating expense for miners? With the challenges and opportunities ahead, what strategies do you suggest for miners moving forward?
@HobbyistMiner:
Regarding miner fees, they are beneficial for miners and indeed increase their profits. However, on the other hand, the increase in Bitcoin transaction volume has also led to some problems. This has resulted in all users on the network facing higher costs, forcing users to reduce the number of transactions due to high fees. Therefore, more and more users are choosing to accumulate BTC, waiting for the network congestion to ease somewhat and for transaction fees to return to normal levels before making transactions.
However, this change is overall beneficial, although it may alter our transaction habits. In the Bitcoin mining sector, this situation was previously unprecedented, even before Bitcoin reached a historical high of $70,000 and the halving event, we had already experienced all this.
Regarding how miners should plan for the future, Tony previously mentioned a key point: electricity costs are the heaviest burden for home and all scales of miners. Frankly, this is the biggest expense we miners face. Therefore, finding a solution and being prepared to meet this challenge becomes crucial. How can we change the current situation? To address this issue, I have relocated some of my mining rigs to places with lower electricity costs. Most of these devices are older models, and doing so can extend their service life. Additionally, I have also invested in purchasing more efficient mining rig models, including a recent batch of ANTMINER S21s with a hashrate of 200 TH/s. Although it cannot be said that they completely counteract the impact of the halving, this at least gives me more resilience when facing a halving of block rewards.
Q6: How can miners seize the chances presented by fluctuations in Bitcoin’s price during the halving?
Paphy:
To my knowledge, some miners may earn more money due to Bitcoin price fluctuations. After the halving, BTC block rewards will become harder to obtain. If the Bitcoin price remains unchanged, mining outputs for cryptocurrencies with the same algorithm (such as BTC, BCH, and XEC) will show significant differences in the short term, so I think miners might switch their hashrate among BTC, BCH, and XEC to maximize mining profits. At the same time, they can also use specific tools to convert their mining earnings into BTC or USDT, which can be easily done through the ViaBTC pool.
The ViaBTC pool supports miners in automatically converting their mined coin into BTC or USDT, and this function can be set to perform a coin-to-coin exchange every hour.
Q7: Have the chips and performance of mining machines started to hit a ceiling? What directions could we anticipate for the advancement of mining technology in the future?
Juliana:
The future direction of the mining industry largely depends on the advancement of mining machine chip technology. The latest generation of mining machines on the market, such as the ANTMINER S21, is one of the most efficient air-cooled mining machines currently, with a hashrate of 200 TH/s and a power efficiency of 17.5J/T, using SMC 4nm chip technology. At the same time, we have received news that 3nm chips will soon make their appearance.
Whatsminer uses chips provided by Samsung and has widely adopted 4nm process technology, while its next-generation mining machine will use 3nm chips. Therefore, in the next two to three years, I believe 3nm will become the cutting-edge chip technology while reaching the 2nm technology level still appears to be a challenge.
For us, I believe purchasing the highest quality mining rigs is crucial, which will not only allow us to smoothly handle the fourth Bitcoin halving but also have a profitable period of about three years.
The above is a summary of the wonderful content from the seminar guests, hoping to provide everyone with valuable information and insights. To enjoy more exciting interactions from the ViaBTC AMA, please listen to our complete live broadcast:
