It appears that the initial effects and consequences of the Bitcoin fork event are starting to emerge.

About a third of Bitcoin miners have already started shutting down their mining hardware after yesterday’s fork that will cut their reward in half, bringing operational costs more than the intended benefit.

Yesterday’s bitcoin mining reward split from 12.5 bitcoins to 6.25 bitcoins per block.

According to Alejandro de la Torre, vice president of mining company Poolin, miners who make up 15% to 30% of the entire Bitcoin network are already in the shutdown phase as their profit margins are coming under more pressure.

Alejandro explained that companies that operate with old mining rigs will be inefficient, such as those who rely on the S9 Bitmain miner, as they consume high electricity compared to what they produce.

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analyze Alejandro explained the situation by saying:

The final difficulty adjustment will occur one week after the split event which will be after 1008 blocks, after which the difficulty is expected to increase.

We expect the first 1008 blocks to be mined after the Bitcoin mining reward fork event similar to before the fork, after which a massive number of miners will fall from the network. We estimate that around 30% of the entire Bitcoin network will be squeezed

Therefore, the Bitcoin miners will face a lot of pressure in the next few days as the split will affect their earnings very significantly.

Some experts believe that the decrease in the supply of bitcoin will contribute to a significant rise in the price of bitcoin, and these experts infer what happened with the previous splits (2012, 2016).

While if the price drops, the pressure will be greater on miners, especially the weak ones, who will be among the first to withdraw.

Alejandro said:

Mining is a long game of survival, and companies that fail to move to more efficient mining machines or find cheaper electricity will give up.

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He added:

We expect many miners to close and withdraw after the halving event, some of whom will likely have cheap enough electricity to survive in the near future.

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History repeats itself: Bitcoin plunged more than 10 percent before the 2016 split

Simple explanation of the Bitcoin mining reward split process