F2Pool: Bitcoin Mining Difficulty Drop Lowers ASIC Machines' ‘Shutdown Price’ to $3,260

The founder of the prominent cryptocurrency mining pool F2Pool Mao Shixing has recently revealed the “shutdown price” for Antminer S9 ASIC machines mining BTC has now fallen to $3,260 after bitcoin’s difficulty drop.

Bitcoin’s mining difficulty dropped this week as its falling price has seen the flagship cryptocurrency’s hashrate plummet from its high in August of this year. The declining difficulty, some have speculated, could signal the bottom of the bear market.

Available data shows the cryptocurrency’s difficulty dropped little over 15%. It’s adjusted every two weeks to maintain a normal 10-minute block time, ensuring its inflation rate remains steady.

On Chinese microblogging website Weibo Shixing shared what it costs his firm to keep ASIC machines running. Although some ASICs like the T9, the S7, and the Avalon 741 and M3 have already reached their “shutdown price,” the newer Antminer S9 is profitable as long as BTC remains above $3,260. The costs were calculated with an average power cost of 0.4 yuan ($0.058) per kWh.

Currently, bitcoin is trading under $3,420 after falling 10.2% in the last 24-hour period. In the last two weeks, the cryptocurrency has lost 22% of its value as its market cap has dropped to $59.45 billion.

Bitcoin's price performance this week

Data from BTC.com shows the next difficulty adjustment, set to occur on December 18, could see the difficulty drop a further 16%. Some have contested the figure, as some miners may have restarted mining after the difficulty adjustment made it profitable to use Antminer S9s. Earlier this year Shixing noted he would be able to mine with the S9 at a profit, if BTC remained above $4,420.

The pool’s CEO has, as CryptoGlobe covered, argued that bitcoin’s halving, in 2020, is set to have “little impact” on the ecosystem. This, as he believes crypto enthusiasts prepare themselves for the event.

Per Shixing, over 800,000 miners have been shut down since mid-November, as the cryptocurrency’s price has been steadily dropping. Blockchain research firm Diar has revealed earlier this year bitcoin mining was starting to become unprofitable for miners operating with retail power costs.

Could President Trump Ban Bitcoin? Experts Weigh In

  • Experts weigh in on the possibility of President Trump banning bitcoin.
  • Increasing concern over libra and large platform digital currencies is driving political agenda. 

Following last week’s attack on bitcoin and Facebook’s libra, experts have voiced their opinion on whether US President Donald Trump could realistically impose a ban on cryptocurrency. 

Not a Fan of Bitcoin

On July 11, President Donald Trump published a series of tweets attacking bitcoin and digital currencies, while championing the dollar. 

President Trump’s comments come in the midst of growing concern over Facebook’s libra, as political regulators around the world scramble to enact policies to deal with the rise of digital currencies. 

Members of the crypto community have questioned the impact of the US President taking an unfavorable stance towards bitcoin. Some crypto pundits predicted the tweets would be good for the price of BTC and ultimately increase exposure to cryptoassets. However, others worry that political influence may lead to a crackdown on cryptocurrency usage. 

Scenarios for Banning Crypto

Alex Kruger, economist and market analyst, published a tweet thread examining the legality and possibility of President Trump banning bitcoin. 

According to Kruger, It would be almost impossible for the US government to outlaw bitcoin as a technological instrument. Aside from the Herculean task of eradicating a decentralized, digital technology, bitcoin is code, which is protected under the first amendment.

However, that same protection is not extended to third-party operators, including cryptocurrency exchanges. 

Kruger quoted Abra CEO and Founder BIll Barhydt, who explained in a Forbes article how the government could target fiat onramps to exchanges, 

“You can’t prevent people from holding ones and zeroes on a device in their pocket. That ship has sailed. We already know that. The question is: What can they do at the edge of the network -- the onramps and offramps, the places where they exert control over the banking system, the exchanges, [and the] stablecoins.”

The US government could prevent retail investors from having access to crypto-assets through exchanges and prevent banks from allowing transfer of funds. Users would still be able to buy crypto through alternative channels, but the current ease of investing would be severely hampered. 

Unlikely, But Not Impossible

President Trump could also issue an executive order banning citizens from dealing in bitcoin, similar to the one he issued against the Petro. While there is a precedent for this route, Kruger claims the order could be easily overturned by Congress, 

Ultimately, Kruger believes that it is unlikley the President or Congress would move to ban bitcoin, and it would be difficult to enact fool-proof policy. However, it's worth considering the political landscape as regulatory concerns mount over Facebook's libra.

Just last week, a copy of a bill reportedly drafted by the House Financial Services Committee surfaced online, under the title "Keep Big Tech Out of Finance." The bill would put an end to Facebook and other large platforms from issuing digital currencies without incurring a severe penalty.

The same could be extended to bitcoin in the event the government finds crypto-assets no longer tolerable for the general public.