If you are into bitcoin mining, do not be surprised if the output suddenly fell through the roof. According to Reuters, the code that was built into the virtual currency system has cut the mining reward into half last July 9. Previously, 25 bitcoins can be mined every 10 minutes but it has been halved to 12.5 in an attempt to curb inflation from the growing number of miners with their extra fast computers.
The halving has serious consequences for dedicated miners because you have to work double to get the same amount of virtual money. Bitcoin miners whose operations are not efficient enough may have to restructure to avoid closing shop. One example is KnCMiner that declared bankruptcy last May after giving warning of impending profit loss. Bitcoin miners who are most likely to survive are those that can keep their costs down to the minimum through low-power computers and minimal staffing.
The bitcoin mining industry must have anticipated the halving considering that the rulebook says that halving will occur every four years. Since the halving schedule occurs like clockwork, users know that rewards will be cut by half. Another halving is set to occur on 2020 and perhaps the bitcoin mining industry will be better prepared so that they can still make money from the transactions.
What is bitcoin cloud mining?
Bitcoin cloud mining means you can share the processing power from data centers located in remote areas. You do not actually need a home computer for mining but it can be important for communications. There are different types of remote bitcoin mining that includes hosted mining, virtual hosted mining and leased hashing power. In hosted mining, you lease a mining computer that is hosted by a provider while in virtual hosted mining; you create a virtual private server and install your own mining software. The most popular method of bitcoin cloud mining is by leasing a certain amount of hashing power without the need for your own computer and specialized software. Since you won’t be paying for electricity, you can consider the monthly lease as an expense to determine whether it is worth the efforts to mine bitcoins.