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.

Error in Time-Locked Bitcoin Contracts Allows for Miner 'Fee-Sniping'

Michael LaVere
  • Crypto researcher 0xb10c discovered an error in bitcoin "time-locked" transactions that could be used as an attack vector.
  • Miners can take advantage of the program to carry out "fee-sniping" and steal funds from one another. 

Users have discovered an error in bitcoin “timelocked” contracts that could potentially allow miners to steal BTC from one another. 

Anonymous crypto engineer 0xb10c reported discovering more than one million “time-locked” transactions made between September 2019 and March 2020. In a post, 0xb10c detailed how these special bitcoin transactions were not being accurately enforced by the network. 

As opposed to normal transactions, time-locked transactions prevent recipient bitcoin from being accessed after sending. Users must wait for a specific number of blocks to be added to the network in ten-minute intervals before gaining control of their bitcoin. 

0xb10c claimed the errant time-locked transactions provided an attack vector for miners to steal transaction fees  from one another via “fee-sniping.” According to the engineer, the backlog of time-locked transactions were being purposefully designed for a “potentially disruptive mining strategy” involving the theft of miner fees. 

In an interview with CoinDesk, 0xb10c said time-locked transactions represented a “low-priority” problem at present that could eventually balloon to involve the wider network. He explained that fee-sniping would become more lucrative in a few years as the majority of miner income shifts towards transaction fees. 

He continued, 

A fix for this has been released in early 2020. However, it will take a while before all instances of the currently deployed software are upgraded.

Featured Image Credit: Photo via Pixabay.com