Ongoing bearish market conditions continue to drive crypto prices down further. For Bitcoin miners, that means a fine line between breaking even or turning a loss. Finding any advantages, including reduced pool fees, can make a tremendous difference.
Crunch Time For Bitcoin Miners
When the price of bitcoin continues to decline, it triggers a ripple effect throughout the crypto industry. There is still some unease following the FTX bankruptcy filing. If anything, the next sell-off is around the corner, which will likely drive prices down even further. That is a problem for investors, but it also impacts the future of bitcoin mining.
As Bitcoin block rewards are cut by 50% every four years, the BTC value tends to increase accordingly. For Bitcoin miners, it ensures their operation continues to either break even or become profitable. However, it creates an issue when the BTC value plummets – from $69,000 in 2021 to barely above $16,100 today. Miners must recuperate their hardware investment and operational costs as quickly as possible. Of course, that is easier said than done when the mined asset loses value.
In addition, the overall Bitcoin mining difficulty has increased enormously in the past few years. As a result, significant companies and mining operators have pointed their hardware at the network to mine BTC and provide security. More mining hardware results in greater mining difficulty, impacting the revenue of all Bitcoin miners. Combined with dwindling BTC prices, it can force many operations out of business.
Whether Bitcoin mining is profitable or not is a tough question to answer. There has been an increase in miner outflows – the amount of BTC sent to exchanges from known miners’ wallets – indicating many are forced to liquidate every scrap of mining rewards. As a result, it will be paramount for miners to explore every advantage they can. That may lead to various miners switching mining pools, depending on where they can get the most bang for the buck.
Reduced Pool Fees Are Beneficial
Those who engage in Bitcoin mining have over a dozen pool options. Depending on which option they choose, the payouts will occur through PPLNS, PPS, FPPS, or other systems. In addition, Bitcoin miners must remember there is often a fee to be paid. That fee can be as high as 4%, although the industry average is closer to 2.5%.
Cutting down that fee will benefit all Bitcoin miners. However, to do so, they may need to explore alternative mining pools, including PEGA Pool. The upcoming mining pool – launching in early 2023 – focuses on renewable energy mining to reduce the industry’s carbon footprint. In addition, users joining the early access waitlist will get a lifetime 50% reduction on pool fees, allowing them to pocket more money from their activities.
Mining fees can differentiate between keeping an operation going or being forced to shut down. PEGA Pool provides an attractive incentive to existing and future miners by slashing those fees for the lifetime of one’s account. In addition, its focus on renewable energy sources aligns with a broader industry push to reduce reliance on fossil fuels.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.