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Bitcoin News

Bitcoin Mining’s New Bidding War

The recent Bitcoin price appreciation has brought an exciting phenomenon not only to the traders but also to Bitcoin miners, especially those that are starting.

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The recent Bitcoin price appreciation has brought an exciting phenomenon not only to the traders but also to Bitcoin miners, especially those that are starting.

As it has turned out, there’s a brewing war on the price of a Bitcoin mining device. The competition for second-hand Bitcoin (BTC) and other crypto mining devices is almost getting out of hand with prices soaring due to the demand.

Although the machines are used, they are profitable. A survey by TokenInsight, a firm dealing with blockchain data, has revealed that it would take between 200 to 350 days for a cryptocurrency miner to recoup the money invested in mining machines. However, this was when Bitcoin was below the $4,00 mark. Now that it’s almost closing the $6,000 mark, the days have been reduced to not more than 200 days.

An analyst from TokenInsight noted:

“When the payback period is apparently below 200 days, it has made more miners feel there’s an opportunity. That further incentivizes their buying demand for secondhand models and leads to price jump and will bring the payback period back above 200 days again.”

Major wholesalers are also reportedly selling more of the old models although it’s not yet clear if they are pilling them for later dates when the prices surge or the models are genuinely out of stock. Some wholesalers are even thought to be “waiting until a bidding war for some models” kick in.

If new models will drive BTC’s hash rate to more than the 60EH/s previously recorded, then only a few of the new AntMiner S17 devices will be needed. For example, assuming the hash rate gets to 70 EH/s, only 220,000 new model devices are needed while 700,000 old models are required if each has a hash power of 45TH/s and 14TH/s respectively.

While new and dominant manufacturers of mining machines continue to develop new models with a higher hash power, their cost is high hence a prolonged payback period. This turns most miners to secondhand mining devices consequently taking the bidding war to another level.

Jason Lee is a writer for various crypto publications and manages a small team on Medium. His love of technology and inquisitive nature set him up with crypto back in early 2016 and he hasn’t looked back since. In his spare time, Jason enjoys rock climbing and wakeboarding.

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