In an effort to make Bitcoin transactions more accessible and affordable, many cryptocurrency exchanges are reducing their transaction fees on purchases made with ASIC miners. The controversial announcement comes amid increasing tension within the mining community over rising mining fees, which have grown by more than 1200% since the beginning of 2017. The new transaction fee policy has elicited mixed reactions from the cryptocurrency community, with some praising the move and others questioning its impact on network security and decentralization. Before we discuss the proposed changes, let’s take a closer look at what exactly ASIC miners are and how they work to secure Bitcoin transactions worldwide.
When ASIC miners first came onto the scene, they quickly became the most efficient way to mine Bitcoin. However, as time has gone on and more ASICs have been produced, the cost of production has decreased. This has led to fee reductions for ASIC miners, which is good news for those who own them. However, some people believe that this could be bad for Bitcoin in the long run. Let’s take a look at both sides of the argument.
The Rationale Behind the Fee Reduction
ASIC miners have been struggling to turn a profit lately. The main reason for this is the sharp decline in the price of Bitcoin. In an effort to stay afloat, some ASIC miners have started to reduce their fees. While this may be good news for miners, it could be bad news for Bitcoin.
Is Fee Reduction a Good Thing?
On the one hand, fee reductions could be a good thing for ASIC miners. After all, they would be able to keep more of their profits. However, on the other hand, fee reductions could be bad for Bitcoin. If miners are not making enough money from fees, they may be tempted to switch to another cryptocurrency that is more profitable. This could lead to a decline in the hashrate and security of the Bitcoin network.
Why Do I Care About This?
As someone who owns an ASIC miner, you are always looking for ways to reduce your costs. Of course, for every price reduction, one wonders how it will impact the price of the crypto in question, for instance, Bitcoin.
It is better to mine coins before they go mainstream and are discovered so you can benefit from price appreciation. A good coin to look at for mining is the Whive Protocol.