Global Chip Shortage Fuels Demand For Secondhand Bitcoin Mining Rigs
With the rise in the Bitcoin (BTC) price making mining much more profitable, the demand for the latest new and secondhand Bitcoin mining rigs is growing.
However, a global chip shortage is slowing the production of mining devices, sending prices of all Bitcoin mining rigs much higher.
Production of new mining devices can’t keep up with demand, and US-based institutional mining firms are reportedly buying most of them. This has led to rocketing prices as demand for new and used Bitcoin mining rigs surges.
Demand For New And Used Mining Rigs Is Surging
With interests in other industries, global chipmakers simply can’t keep up with demand. As a result, brand new devices have doubled in price, while secondhand Bitcoin mining rigs have increased significantly.
This is impacting not only institutions, but solo miners too, some of whom are being priced out of buying used mining rigs as institutions look for the next best thing.
The lack of production and demand for Bitcoin hashpower is leading the secondhand market to flourish. The best high-end used mining rigs are going for as much as $5,000, and all models are being sold at a premium.
According to a sales manager at Jiangsu Haifanxin Technology, ‘prices have jumped 50 percent to 60 percent over the past year, while prices of new equipment more than doubled. High-end, secondhand mining machines were quoted around $5,000.’
Chipmakers Shunning The Bitcoin Mining Industry
The problem isn’t solely with the mining manufacturing production, however. Global chipmakers are prioritising other sectors instead of the Bitcoin mining industry.
Bitcoin mining manufacturer Innosilicon vice-president Alex Ao claims, ‘There are not enough chips to support the production of mining rigs,’ as chipmakers prioritise other sectors, such as consumer electronics and the automobile industries.
According to a Reuters published report, ‘Taiwan Semiconductor Manufacturing Co and Samsung Electronics Co, the main producers of specially designed chips used in mining rigs, would also prioritise supplies to sectors such as consumer electronics, whose chip demand is seen as more stable.’
The slowing of production due to covid 19 hasn’t helped. As the world slowly gets back to normal, however, the demand for consumer electronics will grow also, so it’s hard to see this production crisis ending anytime soon.
As Mining Profits Soar So Does The Demand For Bitcoin Mining Rigs
With the price of Bitcoin surging to new highs, there’s less emphasis on electricity or the power of one’s mining rig for mining profitability.
But with more profits, comes more demand, and we’re seeing this with the price of new and secondhand Bitcoin mining rigs going through the roof.
Many will say it’s a feature of Bitcoin’s success, and while this is true, it’s cutting out the solo miner who can’t afford to pay a premium for used mining rigs.
Others will say they had years to acquire and speculate that it would one day turn profitable, but many can’t afford to invest in future earnings.
There is no perfect outcome, and all we can hope for is the production of chips begins to accelerate, or the price of new and secondhand Bitcoin mining rigs will continue to rise.
Author: Tommy Limpitlaw
How much does it cost to mine 1 Bitcoin?
There is no exact science for the cost of mining a bitcoin, because the price will change every two weeks maximum. This is because there’s a Difficulty Adjustment that ensures it takes about 10 minutes to mine a block. And with other costs, such as your mining equipment, electricity, and other costs, it’s estimated that the average price to mine a bitcoin is around $12,500.
How long does it take to mine 1 Bitcoin?
On average, the time it takes for miners to mine BTC is 10 minutes. But they don’t just mine 1 BTC. Mined Bitcoins are created with every new block and these produce the Bitcoin block reward which at the moment is 6.25 BTC, so you could say it takes less than 2 minutes to mine each Bitcoin.
How much should I invest in Bitcoin?
Bitcoin is a new technology, and an asset that is finding its value. It has great potential, but the price is volatile, so investing in it should only be for those who understand it and have faith in it. Make sure you position size with something you’re comfortable with because 10% moves either way are not uncommon.
What is the point in Bitcoin?
Bitcoin is a decentralized money. A money that nobody can control or manipulate, and a money that nobody can print and devalue. It’s also not necessary for any third party to verify transactions, so it makes it much faster and cheaper to send value. It’s also money built on the Internet: a society of almost 5 billion people.
A Bitcoiner since 2017 and a Bitcoin Maximalist since 2018, Tommy is our main writer and editor at Bitcoin Maximalist. Other than researching and writing about Bitcoin, Tommy loves spending time with his family and supporting his beloved Leeds United.