Headline : Bitcoin Miners Brace for the ‘Halving’—and Race to Cash In

Read more from the original article on here at www.wired.com.

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By the end of Friday, the size of the reward for mining bitcoin will have been cut in half. The event—known as the halving—takes place roughly once every four years, and it can be fatal for the mining companies that compete for the newly minted cryptocurrency.

“You don’t see that in any other industry,” says Charles Chong, director of strategy at Foundry, a company that mines bitcoin and provides services to other miners. “You’re on a treadmill. If you don’t keep running, you are going to get left behind.” The only mercy, he says, is that “you get a lot of time to prepare.”

In every halving, mining companies no longer able to cover their expenses have shut off their machines. Smaller, backyard operations have closed down entirely. As unprofitable mining equipment drops from the network, the Bitcoin system recalibrates, reducing the amount of computing power (and therefore the cost) it takes to win new coins. In time, an equilibrium is restored, whereby mining becomes profitable again for those able to absorb the initial blow.

In March, the price of bitcoin rose to a record high of more than $70,000 per coin, so the danger for mining companies is reduced. In this case, although mining revenue will be cut in half, the associated earnings will still outweigh the cost to run the hardware, multiple mining companies claim.

Read more from the original article on here at www.wired.com.

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