USA and China Trade War Hasn’t Hindered Global Crypto Mining Activities (Yet)
Most of us are aware of the massive decline in Bitcoin prices with its value falling close to 70% from its peak. But most of us are unaware that the hash power of the Bitcoin network has been increasing despite the massive fluctuation in prices.
The breakeven cost of mining, considering Bitcoin value to be $6,400 and hash power around 35 million TH/s, is between &7,000 to $8,000. This means that the miners are running in losses and are optimistic of the prices shooting up above the $8,000. Which means that most Bitcoin miners around the world have not made profit at least since June of this year.
However, there is news to be optimistic about the future. The increased hash rate shows that there has been substantial growth in the usage rate and activity around the coin.
Regulation around crypto mining
Many countries have been trying to put some kind of framework around mining companies. Mining facilities in US, Japan and South Korea have been welcomed by the government, provided that they are energy efficient. China and Russia still have ambiguous crypto regulations.
China is a curious example in the crypto ecosystem. They have banned almost every business around the crypto sector except for two use cases, which are crypto transactions and mining. Russia is another dominant player in the mining industry because of its naturally cold climate and cheap electricity.
Influence of the trade war
The newly enforced tariffs by US President Donald Trump has increased the cost of mining equipments. One of Bitmain’s most sold equipment Antminer S9 saw its price rise by 27.6 %. Notably, prior to these tariffs, Bitmain was able to ship their products under no tariffs since it was classified under the subdivision of data processing machine.
As South Korea remains unaffected by the global trade wars, companies like Samsung are trying to jump on the crypto hardware manufacturing bandwagon. Samsung started to produce a new 7nm chip known as Low Power Plus (7LPP) process node. According to the company, the new chip is able to reduce energy consumption by up to 50%.
We have to see how new players like Samsung and GMO disrupt the nascent yet volatile crypto mining industry.