Can $0.01 Electricity Save Crypto Miners in Sichuan?
Although the environment for crypto mining business is incredibly harsh at present, ambitious miners are eager for action under the dual enticement of the dumping price of mining device and the extreme cheap electricity in Sichuan as the wet season is upcoming.
As the mining hub in China, Sichuan offers abundant and cheap hydroelectric energy. There are 1,419 rivers in this region which may propel 3,267 hydro plants. The wet in Sichuan begins in April and the hydropower hit the peak from May to October.
It was reported that, In the period of high water, the cost of electricity in Sichuan can be as low as 0.08 yuan ($0.01), while the electricity cost of thermal power in the dry season is 0.28 yuan ($0.04). The difference between the two is more than three times.
Despite the current bear market, there are still some firm believers considered that tokens will always hold value. In this situation, energy cost becomes a key factor that determines the mining profit.
In addition, the mining devices are sold at an extremely low price or even sold by kilos. Some sources reported that a second-hand AntMiner S9 only cost 800 yuan.
The low cost of mining rig and the upcoming cheap electricity renew hope for crypto miners in the crypto winter. However, many analysts have indicated that this bear run doesn’t seem to end in the short term, any further price full would put miners between a rock and a hard place.
Leading crypto asset researcher Filb Filb twitted that Bitcoin needs to reach at least $7,000 in May 2020 to prevent any risk to the mining industry, which is near twice the price today.
Here is what happens in Bitcoin does not appreciate and the miners need to maintain their revenue.
Obviously 2020 is the pressing concern.
Mining fees would need to increase by 46x to maintain MR.
So we need to get to $7k next May at the latest to avoid any risk. pic.twitter.com/HjKr6eOvDg
— fil₿fil₿ (@filbfilb) February 10, 2019
According to Filb, the Bitcoin price must be higher to allow miners to maintain a consistent revenue as the cumulative value of network costs is expected to be flat or declining drive by Lightning Network.
He also claims that as the number of Bitcoins would be reduced by half, its price needs to continue to double every four years to maintain the mining industry.