BY CNA team - November 26, 2018
Chinese crypto miners dumping rigs on price slump
The prolonged slump in the crypto markets has had negative spillover effects on bitcoin mining, with miners not only turning off their machines but also trying to sell them for fire-sale prices.
Chinese crypto news site 8BTC reports that small and medium-sized mines located in China’s Xinjiang and Inner Mongolia provinces are said to be selling their older mining rigs for only 5% of what they were worth last year.
It cites F2Pool founder Mao Shixing, who posted on Weibo a picture that miners are selling their rigs by the kilogram.
Mao had in September pointed out that older rigs such as the Antminer S7, T9 and Avalon A741, are no longer profitable. F2Pool is one of the larger Chinese mining pools.
8BTC noted that miners’ woes have been made worst by the current dry season in Sichuan province and other areas popular as sites for bitcoin mining because of the power supply shortage.
Earlier in October, crypto research outfit Diar published a report saying that smaller miners of bitcoins have become unprofitable on a combination of higher electricity costs, lower bitcoin price and higher hash rate needed to mine the cryptocurrency.
It says that China is one of the few countries where it still makes economic sense to mine for bitcoins on retail electricity rates.
But smaller miners still need to watch cashflow as equipment, wages, rent and other overheads can very well push the inexperienced ones into the red.
But the decline in bitcoin’s price has hit even major crypto mining firms, with East Wenatchee, Washington-based Giga Watt, a US crypto miner, filing for bankruptcy on Nov 19, claiming an inability to pay debts.