Miners face rising hardware and energy prices

We talk about what problems miners faced during the bear market, and how their troublesimpact on the cryptocurrency industry.

Cryptocurrency miners fell into the funnel of the “idealstorm." The once simple and profitable operation suddenly became unprofitable, prompting companies and private miners to sell off equipment at bargain prices and shut down their businesses.

What happened to the miners?

Mining is the process of obtaining new crypto coins.It requires hardware, such as processors, video cards, or special devices - ASIC (ASIC). This equipment becomes technically obsolete very quickly, it needs to be updated regularly, but the prices of the latest models are rising rapidly due to a shortage of chips and problems with logistics.

Expensive equipment is not so bad. Miners need electricity to operate. Lots of electricity. Each Bitcoin transaction consumes 1,483.91 kWh.

But the energy crisis is raging in the world and electricity tariffs in many countries have risen by tens of percent. In some regions, there is not enough electricity for simple life, much less for mining.

Finally, regulators are concerned thathow mining affects the environment. In the US, some states are considering banning digital asset mining. The authorities in New York, for example, have already approved a ban on Bitcoin mining.

Bottom line: miners are forced to cope with rising prices for equipment and electricity, all in the face of a falling cryptocurrency market and tightening regulatory pressure.

How do miners survive?

Maintain and maintain expensivemining equipment turned out to be unaffordable for many market participants. To stay afloat, they sell their devices on the secondary market for next to nothing, or get rid of digital assets accumulated during good times.

Despite the deep crisis, not everything is over for the industrylost. Crypto mining giant Marathon Digital has managed to capitalize on the bear market and has yet to sell a single Bitcoin, although the company's shares dropped 40% in June.

What is happening with mining in Russia?

Russian miners have a doubly hard time. All of the above problems of the global industry are superimposed by internal specifics: sanctions and aggressive regulators.

The Central Bank of Russia at first wanted to completelyban mining, but then relented and decided that it could be legalized as a type of entrepreneurial activity. On the one hand, the legislation will allow miners to leave the gray zone. On the other hand, the regulator intends to strictly control their activities. In addition, if private miners are equated with entrepreneurs, they will have to pay for electricity at commercial rates. And this is a completely different story.

Read about what is happening to the Russian mining industry under sanctions in a separate article.

What does all of this mean?

The crypto industry around the world is going through a difficultperiod, being in the longest fall in the history of the CFA. The crisis and increased pressure from regulators create a suffocating working environment for all participants in the crypto market.

The extraction of new cryptocurrencies, when the future of existing ones is unknown, becomes an unprofitable occupation that either cannot increase capital, or does not pay off investments, or causes losses.

Mining is the core of the entire crypto market. The future of the digital asset industry will largely depend on whether miners can withstand such a blow.

Where is it more profitable to buy cryptocurrency? TOP-5 exchanges

For a safe and convenient purchase of cryptocurrencies with a minimum commission, we have prepared a rating of the most reliable and popular cryptocurrency exchanges that support deposits and withdrawals of funds inrubles, hryvnias, dollars and euros.

The reliability of the site is primarily determinedtrading volume and number of users. By all key metrics, the largest crypto exchange in the world is Binance. The platform supports transfers in rubles from bank cardsVisa / MasterCardand payment systemsQIWI, Advcash, Payeer.

Especially for beginners, we have prepared a detailed guide: How to buy bitcoin on a crypto exchange for rubles?

Rating of cryptocurrency exchanges:

#	Exchange:	Website:	Rating:
1	Binance (Editor's Choice)	https://binance.com	9.7
2	Bitget	https://bitget.com	7.8
3	Huobi	https://huobi.com	7.2
4	AAX	https://aax.com	6.9
5	Bybit	https://bybit.com	6.3

The criteria by which the rating is set in our rating of crypto-exchanges:

• Work reliability— stability of access to all functions of the platform, including uninterrupted trading, deposits and withdrawals of funds, as well as the duration of the market and daily trading volume.
• Commissions– the amount of commission for trading operations within the platform and withdrawal of assets.
• Additional features and services— futures, options, staking, NFT marketplace.
• Feedback and support– we analyze user reviews and the quality of technical support.
• Convenience of the interface– we evaluate the functionality and intuitiveness of the interface, possible errors and failures when working with the exchange.
• final grade– the average number of points for all indicators determines the place in the ranking.