Amidst the upcoming Bitcoin halving event, which will reduce miner rewards, the crypto industry is preparing by shipping outdated mining machines overseas. These machines will be refurbished and sold in countries with lower electricity costs, such as Ethiopia, to maintain profitability. The halving event, set for next month, will cut miner rewards in half, prompting miners to explore cost-effective measures to continue operations.
Bitcoin Miners Seek Cost-Effective Solutions Amid Halving Event
As the long-anticipated Bitcoin halving event looms on the horizon, cryptocurrency miners are implementing strategies to mitigate the imminent reduction in their rewards. One such measure involves the refurbishment and overseas relocation of outdated Bitcoin mining machines.
Bloomberg reports that SunnySide Digital, a crypto wholesaler operating in Colorado Springs, will refurbish approximately 6,000 obsolete mining machines and resell them to miners in countries such as Ethiopia, Tanzania, Paraguay, and Uruguay.
The halving event, scheduled for next month, will halve the reward for miners, from the current 6.25 Bitcoin to 3.125 Bitcoin. This necessitates cost-cutting measures for miners to maintain profitability.
Energy consumption is a major expense for Bitcoin miners, who utilize powerful computers to solve complex cryptographic puzzles to add new tokens to the blockchain. In response to the halving, some miners are opting to upgrade to more energy-efficient machines, while others are seeking alternative solutions.
The relocation of outdated machines to countries with lower electricity costs, such as Ethiopia, enables miners to continue operating their machines profitably. SunnySide Digital describes this process as a "natural migration" accelerated by the halving.
Data from The Miner Mag, a cryptocurrency outlet, indicates an increase in private mining activity leading up to the halving, as older miners seek to extract maximum value from their existing machines before the reward reduction takes effect.
The halving event is also anticipated to trigger a surge in Bitcoin prices. Currently trading at $66,911, Bitcoin has gained over 50% year-to-date, albeit retreating from recent highs of $73,798.
