The bitcoin halving, one of the most anticipated crypto events in 2024, is less than a month away, and miners appear to be fully prepared for its consequences. The April event is expected to halve mining rewards on the bitcoin network, making validation of transactions less lucrative.
As of now, miners receive 6.25 btc for every validated block added to the network. However, the halving will split your income by 3,125 btc for each block. Interestingly, many miners in the United States appear to be making adjustments, including upgrading to more efficient mining computers, to ensure they remain profitable.
Why bitcoin Miners Are Moving Out of the US
According to Luxor technology, a crypto mining services and logistics provider, around 600,000 S19 series mining rigs, representing a large proportion of the machines currently in use in the United States, are being moved out of the country. Mining computers are being transferred (or sold) mainly to countries in Africa and South America, a bitcoin-halving-spurs-exodus-of-old-us-mining-computers-abroad” target=”_blank” rel=”noopener nofollow”>Bloomberg Report revealed.
The S19 series are older models of bitcoin mining machines and may not be cost effective to operate in countries like the United States where energy costs are relatively high. This explains why the country's miners are abandoning older computers for more efficient ones.
The report cited another major player in the bitcoin mining industry, saying that while the S19 series and similar models may not be profitable to operate in the United States, “they can still generate decent profits and have a longer life if hosted ” in certain regions of Africa.
Meanwhile, some miners are choosing to sell their hardware, with buyers of the old machines operating in parts of the world with cheap power. Many of these buyers are from Paraguay, Uruguay, Tanzania and, above all, Ethiopia.
According to Luxor, the upcoming halving event has been influencing buyers' behavior towards purchasing old mining machines. “Some buyers are waiting until after the event to purchase older computers, assuming their prices will drop further,” the company revealed.
With the bitcoin halving approaching, Luxor estimates that around 600,000 S19 bitcoin rigs, the majority of the machines currently in use, are primarily moving out of the US to places like Africa and South America, where energy is cheaper. The S19 can cost up to $11,500 per unit for…
– Wu Blockchain (@WuBlockchain) March 24, 2024
Ethiopia: the next crypto mining hub?
Ethiopia, a country located in the Horn of Africa, is building a strong reputation in the cryptocurrency and bitcoin mining niche. As inferred above, a significant proportion of aging American machines are being transferred to the East African nation.
Ethiopia's cheap electricity has been noted as the main factor driving this development. The Bloomberg report revealed that electricity costs about 3 cents per kWh in Ethiopia, while in the United States it ranges between 3 and 6 cents.
In early February, Bloomberg revealed that Chinese crypto mining companies are increasing their investments in Ethiopia. While China's strict stance against cryptocurrencies is believed to have played a role, Ethiopia's cheap power appears to have played a larger role in the companies' decision.
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