RESEARCH: How Miners are Preparing for Lower Block Rewards

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4.7 • 698 Ratings

🗓️ 11 April 2020

⏱️ 33 minutes

🔗️ Recording | iTunes | RSS

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Summary

How are bitcoin (BTC) miners strategizing for the upcoming halving event in which block reward subsidies will be cut by 50 percent? On this week’s episode of “Bitcoin Halving 2020: Miner Perspectives,” Kristy-Leigh Minehan and Pavel Moravec give an in-depth explanation of what miners are doing to maximize profits and increase operational efficiency. Since October, Minehan explains, bitcoin mining farms have been getting on “the upgrade train” and purchasing state-of-the-art ASIC machines such as the Antminer S17 and S19. Moravec says bitcoin miners have also been looking at creative ways to cut electricity costs by leveraging surplus energy from certain cities’ power grids. What started primarily as a hobby in 2009 has flourished over the years, gained broader adoption and ultimately evolved into a new, professional industry. “We’ve gotten to a point in bitcoin’s history where the government is paying attention and has started to realize bitcoin isn’t going away. Mining is not going away. And it’s in their best interest to start working with ... miners,” Minehan said. Teaming up with local governments and utility providers is another miner strategy both Minehan and Moravec have seen on the increase in recent years. This is why Minehan believes even the geographic distribution of miners, which was discussed in depth in an earlier podcast episode, may further diversify in future to regions such as North America and Europe. To download or stream this episode, you can go to Apple Podcasts, Spotify, Pocketcasts, Google Podcasts, Castbox, Stitcher, RadioPublica or RSS. For early access to future episodes, be sure to click subscribe on these channels. For more information about the bitcoin halving, CoinDesk Research recently published a 30-page explainer report on these events, which features additional commentary from Minehan, Moravec and other mining industry experts. The report is free to download on the CoinDesk website. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Transcript

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0:00.0	We've gotten to a point in Bitcoin's history where the government is paying attention
0:08.0	and has started to realize that Bitcoin isn't going away, mining is not going away,
0:13.0	so it's in their best interest to start working with these miners.
0:17.0	And that generally utility companies and a lot of the local governments actually favor Bitcoin mining
0:24.4	today because it creates extra jobs. They create a lot of extra cash flow.
0:31.8	Hello, everyone. Welcome to the second episode of CoinDesk's Bitcoin-Having 2020 podcast series.
0:39.3	On this episode, I'm joined by cryptocurrency mining expert, Christy Lee Minahan.
0:44.3	She works with developing GPU and ASIC mining products at various companies, including
0:49.1	Corweep, CoinMine, and most recently, Stealth Mode Hardware Manufacture. Also joining us is Pavel Moravik,
0:56.7	the CEO and founder of Brains, a cryptocurrency mining company which has been operating
1:01.8	and developing the first Bitcoin mining pool called Slushbowl for the past six years.
1:07.4	It is a pleasure to have you too on the podcast. Thank you for having us.
1:12.5	The latest estimates put the next Bitcoin having where block subsidy rewards reduce by
1:19.5	half at 45 days away. That's just under two months or in the next six weeks or so.
1:27.2	Pavel, what are Bitcoin miners doing to prepare for this once every four-year event?
1:31.3	I think they behave mostly the same as in between these events because the halving is very similar
1:40.3	to a price drop.
1:41.3	So miners are really facing this kind of problems during the years inevitably
1:47.9	just by price movements. This is a different situation only because we know up front that it's
1:54.9	going to happen and it's going to be roughly 50% reduction. But the strategies are mostly the same as
2:00.2	during the years, just be as efficient
2:03.7	as possible, cutting costs, running the machines on the cheapest electricity available with the
	...

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