Bitcoin Global News (BGN)
May 7, 2019 -- ADVFN Crypto NewsWire -- March and April of this
year were two of the most stable times for Bitcoin’s price since
2016 when the price remained below $1,000. After spending the
previous two months trending near $4,000, the price of Bitcoin is
now nearing $6,000. Although many still view Bitcoin as an
investment, this price change creates direct impact on a number of
related industries, namely the mining process that secures the
Bitcoin network and facilitates transactions of the
cryptocurrency.
In the early years of Bitcoin,
anyone could use their normal computer to run mining software, and
potentially earn a small income from the process. However, as the
price rose, development of equipment tailored for this process
evolved in proportion. This coincided with big improvements to
computer hardware across the board, which helped push novel ways of
mining. Normal computers (CPUs) were quickly outpaced by miners
using graphics cards (GPUs), and eventually ASIC computers took
over the market with their superior performance.
Used Mining Equipment
Market
During the massive price surge of
all cryptocurrencies in late 2017, the shelves of stores selling
GPUs and ASIC miners were left empty, and many computer hardware
companies began producing mining specific hardware to meet the
demand. However, when the price fell dramatically in early 2018,
the situation flipped. These companies stopped producing new
machinery, as the market had been flooded. But now there is a
growing market for second hand mining equipment - especially in
China, the world’s leader in Bitcoin mining.
The price of used ASIC miners has
nearly doubled to between $250-$320 for old Bitmain Antminers. This
was one of the earliest, most popular miners. Newer models are now
sold for roughly $1,000. Although they are cheaper, because of
decreased performance of older models, the payback period for
either choice is roughly 200 to 350 days.
“When the payback period is
apparently below 200 days, it has made more miners feel there’s an
opportunity. That further incentivizes their buying demand for
secondhand models and leads to a price jump and will bring the
payback period back above 200 days again.” - Michael Zhong, a
mining analyst at TokenInsight
Until the price of Bitcoin reaches
roughly $8,000, it is unlikely that any of these mining equipment
companies will release their newest models. Because of this, the
secondhand market could continue to grow. However, if the
volatility of Bitcoin’s price nears anything close to 2017, a move
from $5,000 to $8,000 could happen in just a few days
time.
By: BGN Editorial Staff