A significant fall in Bitcoin to USD price is posing threats to existence of cryptocurrency mines. According to media reports Bitcoin mining sites in USA and China closed down after price of BTC fell to a historic low of USD 4500.
It has not been even an year when Bitcoin price reaching the $20,000 mark was surprising the people and they were lamenting why they were not the first to buy it. Now the circumstances have changed and they have left BTC investors scratching their heads.
Declining Bitcoin to USD Rate and Crypto Mines
Cryptocurrency prices continued to hike up until there were no regulations in place. Later, Google ban on crypto advertisements, and speculations about regulations in some Asian exchanges lead to the fall in prices.
According to the latest media reports, impact of Bitcoin to USD rate decline is causing the closure of some cryptocurrency mines in USA and China.
A US based mining firm Giga Watt filed for bankruptcy after it was unable to pay USD7 million. According to Coin Desk the corporation will be best served of reorganized under the chapter 11 of bankruptcy code.
There are also reports that Chinese mining companies are closing their mining facilities due to low profitability. And same is the case with some Hong Kong based miners who are unable to pay costs. It is to be noted that cryptocurrency mining is more viable in China as it has cheapest electricity available.
What Is Cryptocurrency Mining
Cryptocurrencies are fintech product based on block chain technology. They are mined with the help of CPUs that run on electricity, These CPUs solve complex puzzles and mathematical products and give out cryptocurrencies like Bitcoin, ether and others depending upon the transaction they keep record of or mathematical problem they solve. So, cryptocurrency mining requires uninterrupted electricity and highly powerful CPUs.
Future of Cryptocurrencies
There are many arguments in favor of Cryptocurrencies like Bitcoins. There are expected to solve some of the most pressing financial challenges that the world is facing. Many government projects are said to use Bitcoins for financial transactions- Dubai real state project is one of them.
Till now there is no such hard regulation in place for trading and mining of cryptocurrency so they are thriving. One can’t say that a tight regulation will be a real danger to these digital products the reason is that they are becoming more useful each passing day. So, a decline in Bitcoin to USD or fluctuation in other cryptocurrency values doesn’t necessarily heralds extinction.