Coronavirus is still at large in 2021! But how it will affect bitcoin mining?
2020 was a difficult year for almost every industry. No one could have predicted the challenges it was going to present, and we feel the same about 2021. Well, according to the data analysis of different companies, we are confident the following trends will define this year!
Constraints in Mining Hardware Distribution
The industry will continue to expand this year, but the restrictions on shipment and logistics of mining equipment won’t be lifted anytime soon. Therefore, miners will be forced to work with inefficient and older hardware. This may force them to mine offline most of the time.
Now that people understand the pandemic, they might navigate through it better. The major players will continue to benefit from Bitcoin’s skyrocketing rate, even during current challenges.
Difficulty in Mining
Mining Bitcoin will get far more difficult this year. If you want to earn rewards then you must oblige to the following conditions
- Solve one block, which is 1MB of Bitcoin Transaction
- You have to be the first miner to the same block
The first condition is achievable for most miners, but the second condition is the real challenge! You will face cut-throat competition to come to the top.
More Geographical Dispersion
China is at the hub of bitcoin miningdogwatch, even though the institutionalized mining industry continues to shift away. Both the technology and major minors have started penetrating other parts of the parts, and we expect this trend to continue throughout this year.
Cryptocurrency and Central Banks
A report issued in 2020 stated that almost every bank around the world is working on some sort of digital currency. China got the lead again as a lottery was held in Suzhou (A Small City near Shanghai), and the residents there received 200 renminbi (valued at $30).
The winners were then encouraged to link their digital prices with their bank accounts. Moreover, if they didn’t spend the prize within the next 2 weeks, it will disappear. It proved to be a successful experiment that helped china move forward with its nationwide adaption of digital currency. This might undercut the demand for bitcoin and other established currencies but it’s still a big achievement.
Emphasis on Business Mining Model Instead of Technology
If mining operations want to be successful, they have to effectively manage/improve their infrastructure and prepare themselves for any surprises. The only way they can do that is by building long term establishments.
The fact that we will hardly see any technological breakthrough during this year makes effective management in businesses far more important. So far, we haven’t seen any new mining hardware or software updates. At this hour, all we can hope is the mining technology will be improved to be greener and more eco-friendly. Renewable energy in crypto mining is the only technological breakthrough people expect during this year.
Tax Regulation for bitcoin mining is still an obscure concept. It’s idealistic, but far too stretched if you consider the ground reality. These taxes will not get widespread and (obviously) will be something unwelcome for most people. Some countries have started working on it to raise revenue based on the potential of crypto, but you need to consider the uncertainties