The beginning of the year brought one world-scale disaster after another. The biggest one so far, of course, is the global coronavirus pandemic. which has already claimed nearly 200,000 lives in only a few months.
While the virus’ outbreak affected the entire world, and even caused a global economic meltdown, it also managed to strike at the crypto industry. Of course, most people would first think of the price drop that took place back in March. However, while this is a part of the problem, it is only a small portion of it.
A much greater concern is the coronavirus’ effect on the crypto mining industry, and here is why.
How Did COVID-19 Impact Crypto Mining?
As we know, coronavirus originally emerged in China. This was the first place where it struck, in the city of Wuhan. It was not long before it started spreading to other areas of the country, and then the rest of the world.
Chinese authorities reacted by shutting down the city, and while their measures did have an effect, they came too late to fully contain the outbreak.
How does this affect the crypto mining industry, you might ask? Well, let’s start from the obvious things first — a shutdown in the country meant that businesses and factories would have to stop working. That also included many of the mining gear manufacturers.
As decentralized as the crypto industry may be, the mining gear still comes from centralized firms, such as Bitmain or Canaan. With the companies affected by the pandemic, their supply chains dried up, and it was impossible to deliver and install new mining units.
All the advantage was given to the essentials, such as food, medicine, and similar things.
Of course, this was only the beginning, a move that started a chain reaction, because the lack of new mining units meant the start of the hash rate decline.
As you likely know, Bitcoin mining is very demanding these days, and mining coins with simple CPUs and GPUs is no longer possible. ASIC miners are a necessity, and without them, entire mining pools had to shut down.
As a result, the total hash rate saw a major drop, going down by 45% since the peak seen in January of this year. Naturally, a lower hash rate means more time needed for transactions to be processed, at least until the mining difficulty corrects itself. It also means lower security of the blockchain, and not to mention that it slows down the process of creating new BTC and releasing them into circulation.
With the lack of new coins, you would expect the BTC price to rise, but this was also not the case. Due to its volatility and risk, many started abandoning Bitcoin, as well as other coins, and buying stablecoins at best, or completely leaving the crypto industry, at worst.
The same happened to traditional markets, as most people left the stocks, bonds, and other products, and started investing in gold and similar assets.
But, to stick to the crypto mining industry — so far, we have seen the failure to deliver new mining gear, which led to the drop in hash rate. At the same time, the drop in hash rate was also caused by the dropping prices, as it became unprofitable to mine cryptocurrencies, despite the low electricity price in China. Meanwhile, the drop in hash rate led to lower security of the crypto networks, more time was needed to process transactions, and the inflow of new coins ended up somewhat lower, as well.
There is also the fact that multiple crypto mining companies decided to help those fighting the virus by donating their computing power to virus researchers. While a noble move, it, obviously, reduces the amount of power needed for maintaining the mining industry.
Survival of the Fittest
Of course, one good thing about this, otherwise very messy situation, is that it will clean the crypto world of those who were unprepared to handle the tough periods.
Unfortunate as it may be, there are plenty of weak companies that have tried their best, but that ended up not being good enough. Some mining firms experienced major losses. Others had to close down shop. In other words, all those who ended up being weak, not prepared, or inflexible were eliminated.
Meanwhile, who will survive and thrive? Those who were ready for the tough periods, and those who were flexible enough to quickly adapt. They are still in business, feeling good, and ready to grow even faster, now that the extra competition is out of their way. Best of all, the surviving companies have proven their worth to the miners, who will at least know where to go to be safe in the time of crisis.
One such company is CoinFly — a firm that is focusing on providing miners with excellent deals more than ever. In fact, CoinFly itself is making the onboarding process easier than ever, while it keeps everything transparent, and it does its best to make mining profitable for the miners.
Its software reduces power consumption, while it increases the hashrate output, as well as the profit. The firm is very transparent, it provides the highest level of security in the asset exchange industry, and more.
It is accessible, adjustable, and provides convenient accounting. It also offers the best offer for the most profitable crypto mining experience. It features automatic equipment tuning and hardware optimization, and everything is based on the plug-and-mine principle — no complications, just start the process and watch the money roll in.
There are only three steps for you to follow, and those are:
- Create a CoinFly Account
- Download COS
- Start mining and get paid every 24 hours
Coinfly has their mining PPS Ethereum pool with Nodes in Microsoft Azure that is open for everyone with 0% commission while it is on the beta-version, no registration and fast entry point to the pool without reinstalling the software.
The most stable, safe, and profitable l. Nodes are in Microsoft Azure. Today we offer an outstanding opportunity to mine free of charge with 0% commission, low payout limits, no registration and etc.
So, while the mining industry may have had a hard time, it is recovering, and this is definitely not its end.
This Is Not the End
Of course, the situation did not look good for a time, but it is important to note that this is not the end of the mining industry, or the crypto industry, for that matter. It is only another difficulty on the road, and one that the crypto industry is more than capable of handling. In fact, it is handling it already.
While the Bitcoin price did drop by over 50% back in March, it has already recovered almost completely. The recovery took some time, but it did come, one day at a time. This is already much better than what we have seen in traditional markets. Only days ago, new reports confirmed that the oil prices went negative for the first time in history. Meanwhile, Bitcoin managed to surge from below $4k to $7,544 at the time of writing, and while the pandemic was at its strongest, too.
Meanwhile, even though the mining farms have experienced problems, mining is still possible, and since the virus started to let go, mining companies that survived it started getting back into the game. It is easier to get into mining than ever before, and with the halving less than a month away, the prices could easily see a surge like never before in the next few months.
That means that this is a perfect time to start accumulating BTC and HODLing until the price skyrockets.