20% of Bitcoin Hash Size Could Be Offline After Halving – Galaxy Digital
After a Bitcoin halving, up to 20% of Bitcoin's hashrate could be offline, halving rewards and stopping only the most efficient miners.
In the year By the end of 2023, more than 70% of Bitcoin's hashrate will be mined by eight ASIC mining models, Galaxy Mining analysts said in a Feb. 14 report, citing CoinMetrics data.
“Given how sensitive different ASIC models are to Bitcoin price and transaction fees as rewards, we estimate that 15 – 20% of network hash volume comes from ASIC models. […] It may come offline,” the analysts wrote.
Galaxy Forecast analyzes future energy prices. Based on “post-halving economics,” the mining machine models the break-even point, with each mining Bitcoin (BTC) block to cut rewards from 6.25 BTC to 3.125 BTC, “transaction fees 15% of rewards, and a Bitcoin price of $45,000.”
Under Galaxy's more conservative estimates, almost all of the older miners — namely Bitmain's S9, Canaan's A1066, and MicroBT's M32 models — will shut down, while about half of MicroBT's M20S and Bitmain S17 models will remain online.
The five models were responsible for a 15% Bitcoin hash rate by the end of 2023.
Most likely to survive will be the Antminer S19 and S19J Pro, which will more than halve the Bitcoin hash rate by 2023, and the new and popular models and Canaan A1246. The costs are high.
However, a more dire scenario would see all older models go completely offline, although Galaxy predicts that the Canaan A1246 and both S19 models could be uploaded again.
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Galaxy analysts noted that their estimates influence certain business decisions.
Miners running “older and more inefficient machines” may have custom firmware to improve the efficiency and productivity of their rigs, some mining models may “switch to miners with cheaper power costs” instead of offline.
The analysts speculated that miners using the newer S19 models may not continue to be profitable and that those using older mining rigs may be bought as upgrades.
The bitcoin halving will be implemented at block number 840,000, which is expected to be released on or around April 20, according to data from Blockchain.
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