Energy is getting more expensive due to negative macroeconomic events while the value of BTC is gradually declining. Bitcoin miners are starting to run into economic problems and it is realistic that some of them will go bankrupt. The EU is considering banning PoW mining over the winter if there is a power shortage. This is not good news for the security of the Bitcoin network. PoW’s dependence on electricity has always been presented as Bitcoin’s biggest advantage. In times of crisis, this dependency is becoming more of a nightmare. Cardano is not facing network security problems. Delegators regularly receive rewards from the protocol and have no reason to worry. In PoW networks, there is strong competition among miners. In the Cardano ecosystem, the main competition is not between delegators, but between pool operators. This has interesting implications.
- The average cost of mining one bitcoin is higher than the current market value.
- Miners are selling almost all the bitcoins they mine, but their profits are declining. Some started selling ASIC hardware.
- The collapse of mining companies will have negative effects on Bitcoin decentralization.
- Bitcoin is not anti-fragile as we cannot say that it tends to perform better during the current period of risk and uncertainty.
- While Bitcoin security is declining and miner collapse is imminent, Cardano security is stable and even growing.
- ADA delegators are friends, miners are enemies.
- If someone sells ADA coins, someone else can buy them immediately. If a miner shuts down the hardware, it immediately affects the size of the hash rate.
- If competition leads to centralization, this is rather bad news for anti-fragility.
This article was prepared by Cardanians with support from Cexplorer.
Read the article: Bitcoin miners go bust while Cardano stakers rejoice | Cardano Explorer