A lot of things have changed in the world of Bitcoin mining. Using computers to generate Bitcoin has become a global business. Unfortunately for at-home miners, it is no longer profitable to do so. Without access to cheap electricity, most enthusiasts are bleeding money left, right, and center.
The Current State of Bitcoin Mining
In theory, anyone in the world can mine Bitcoin with their computer. The more powerful the hardware is, the better one’s chance at success. By joining a mining pool, computing power can be bundled and rewards distributed accordingly. The concept still exists, but the profitability rate tells a worrying tale. At-home Bitcoin mining is, for most people, unprofitable in this day and age.
Several factors are influencing this development. On the one hand, there is the increasing Bitcoin mining hashrate. More miners from all over the world partake in this business model compared to five years ago. Additionally, more miners have resulted in competitive hardware being developed. The ASICs are far more powerful than regular computers. They also serve one purpose: mining Bitcoin as efficiently as possible.
Secondly, there is the electricity price. Consumers do not benefit from the lowest electricity prices in most countries. As such, they need to generate more bitcoins to offset the mining costs. In this day and age, that is no longer possible. Analytics firm Diar confirms as much, and there is no immediate improvement in sight.
Institutional Firms Take Control
One of the biggest fears is how Bitcoin mining will become centralized. Fewer entities will contribute most of the hardware. As such, they can exert a degree of control over the network, especially when collusion occurs. To date, this has not been a problem, but the threat still remains in place. Major firms are setting up their Bitcoin mining operations in regions where cheap electricity is abundant.
Compared to at-home miners, these companies can maintain a decent profit. Consumers pay more for electricity than they earn from mining Bitcoin at home. That is partially because of a declining BTC value. If the market rebounds, these statistics can look very different. Falling Bitcoin prices are not making life easier for the bigger mining companies either.
Moreover, those companies face a hike in electricity prices. Numerous regions are adding a separate tariff for Bitcoin mining operations. It is another example of how big money is made to even contemplate a Bitcoin mining venture. For at-home enthusiasts, the era of BTC mining is slowly coming to an end. Unless Bitcoin’s value rises, there will be little to no profit to be made from exploring this option.
What do you think about the current state of Bitcoin mining? Do you think it could become worthwhile again? Let us know in the comments below.
Images courtesy of ShutterStock