How mining energy costs affect Bitcoin price
The amount of energy a miner uses in the Bitcoin network hinges on the availability of cheap and bountiful supply of energy, availability of energy efficient hardware and the complexity of solving problems by the Bitcoin machines to earn Bitcoins. For instance, if a problem is difficult, it will require a lot of energy resources to solve. The bottom-line is when the problems to be solved are complex, and there is the unavailability of energy-efficient hardware, and the cost of electricity is high, Bitcoin price will be high.
However, Bitcoin owners and miners are hard at work every day to find ways to reduce energy costs, and one step they have already taken is to move to China. No wonder that China attributes to 60% of all Bitcoin mining operations. Most Bitcoin miners in China are located in the province of Sichuan. This province dominates in the production of hydropower in China.
Why Bitcoin mining explosion has caused Bitcoin price to reduce
Over the years, Bitcoin owners and miners have worked hard to acquire energy efficient hardware and to find cheap sources of electricity. But even with these developments, the Bitcoin price has continued to increase. This is attributed to the difficult levels of mining Bitcoin.
The halving of Bitcoin mining rewards (that’s from 25 to 12.5) by Bitcoin owners has also made the price to go up. This means Bitcoin miners have to put in extra effort and resources to be able to earn what they used to earn. Speculation has also contributed to the skyrocketing price of bitcoin.
If you want to venture into Bitcoin and you don’t have the equipment and energy to mine Bitcoins, you can trade Bitcoin. The good thing about trading is that you can make money whether the price goes up or down. If the price goes down, you can short-sale. You can also take advantage of price increases to sell at a profit.
— LazyMF (@LazyMFofficial) 28 de febrero de 2018