Why must miners join the mining power (Why do people still do it when it’s so dangerous)?

Why must miners join the mining power? Difficulty adjustment in mining is a major trend in the cryptocurrency industry. The overall network hash rate of Bitcoin has been steadily increasing since December 2017. According to data from Coinmarketcap, the growth rate of the overall network hash rate in 2019 exceeded 70%, while the price of Bitcoin reached around $20,000 during the same period. With the continuous rise in the price of Bitcoin, the price of the currency has been constantly increasing in the past few months, currently totaling around $9,130. Why must miners join the mining power? First, the average daily income per THash/s in the entire Bitcoin network.

Bitcoin has an approximate daily inflation rate of 1%. Due to the decentralized and tamper-proof nature of blockchain technology (i.e., data can be traced), the time it takes to generate each block is fixed (e.g., 10 minutes). However, when you make a transaction, you must verify the transactions on the network to confirm whether any transfers have occurred. This issue is very important: miners will treat it as a value store, not just for computation or payment. This means that now we need to transfer these assets to new wallets and manage them through various operations.

Second, if you want to mine Bitcoin or other digital currencies, in addition to mining Bitcoin, you should also consider how to use mining power to reduce costs and improve efficiency. Therefore, fundamentally speaking, the reason why miners still invest in mining power is to make themselves more flexible and capable of participating in their own business. Miners can increase their hardware resources and set up new devices to gain greater freedom and control.

Third, how can miners choose not to join the mining power? Why do all miners need to join the mining power? Why must miners join the mining power? What advantages do miners have? First, mining machine manufacturers generally provide some technical support. For example, professional GPU mining farms provide a small machine with running software to protect their ASIC chips. Therefore, as long as your mining machine has sufficient computing power, it can work online at any time, ensuring that your computer is not attacked by hackers and that it can continue to operate without any threats. Of course, some people say, “I hope to see more companies willing to enter this mode.” There are also people who say, “Because I think the mining market is profitable,” and they think that the profit margins of mining machines are huge. “I think we all have a certain reserve of funds. We can invest more money in computing power and cloud computing products to avoid high returns that we cannot afford in extreme market conditions. In addition, some companies may launch corresponding services.” In May and June, Bitmain released the Antminer S19 Pro series, and the latest generation of graphics cards, M30S, is expected to be released in late August, with an expected price of up to 200,000 yuan. According to their official tweet, “Bitmain’s mining power is steadily increasing, and it is expected to be listed by the end of July this year.” Regarding this upgrade of Bitmain, the relevant person in charge of Ant Financial introduced:

For Ethereum, the most popular one now is Ant L3+. Its design concept is to solve transaction congestion on Ethereum.

Why do people still do mining when it’s so dangerous?

This afternoon at 4 o’clock, Bitcoin broke through the $12,000 mark again. According to Bitcoin.com, the currency price has dropped below $11,000 USDT, with a 24-hour decrease of nearly 15%.

For miners, this is a major loss: because they don’t know how to deal with transactions, they cannot mine; if theft or hacker attacks occur at some point, they can bear this risk on their own; and there are still many solutions to this problem, such as letting customers transfer money to exchanges, etc.