Comment

Comment on Bitcoin mining is no longer profitable

bjorney@lemmy.ca ⁨3⁩ ⁨weeks⁩ ago

New data tells us that mining a single Bitcoin or one BTC costs the largest public mining companies over $82,000 USD, which is nearly double the figure it did the previous quarter. Estimates for smaller organisations say you need to spend about $137,000 to get that single BTC in return. BTC is currently only valued at $94,703 USD, which seems to be a problem in the math department.

Bitcoin mining will always be profitable for the people with the cheapest electricity and largest economies of scale. There is a difficulty adjustment algorithm in the protocol that ensures this. When the price tanks people turn off thier miners, difficulty adjusts downwards, and then it takes less electricity to find a block.

tl;dr title is wrong

source

Sort:hotnew top

HubertManne@piefed.social ⁨3⁩ ⁨weeks⁩ ago
this is what im always trying to get people to understand. bitcoin is programmed to take more resources to artificially increase in value. its why its so horrible for the environment and why it could never really be used as a currency. Now other coins fix this issue but bitcoin tends to be popular because its fixed. Some even do useful work like gridcoin.

source
- slacktoid@lemmy.ml ⁨3⁩ ⁨weeks⁩ ago
  Libertarian economic theory failing in front of our very eyes
  
  source
  - PoPoP@lemm.ee ⁨3⁩ ⁨weeks⁩ ago
    At this point, if we were smart, we would recognize that this thing is going nowhere and leverage it to drive the renewables market. The planet will be sterile before any revolution happens. Capitalism is another thing that is going nowhere. But you can fold it in on itself to trick it into actually doing something good for a change.
    
    Gotta play the hand you’re dealt.
    
    source
    slacktoid@lemmy.ml ⁨3⁩ ⁨weeks⁩ ago
    Agreed. Sometimes we need to coopt the tools and language of the oppressor to get closer to the revolution
    
    source
Hirom@beehaw.org ⁨3⁩ ⁨weeks⁩ ago
The headline isn’t accurate as usual, but isn’t completely wrong either. We’re at a point where it’s no longer profitable for individual minors, even if we ignore externalities like the cost we’re collectively paying due to mining pollution and carbon emissions.

Mining is require increasing amount of energy and resources as time pass, so unless there’s a radical change in bitcoin’s algorithm or unless energy becomes free, we should expect mining to get non-profitable in more and more situations.

source
- bjorney@lemmy.ca ⁨3⁩ ⁨weeks⁩ ago
  We’re at a point where it’s no longer profitable for individual miners
  
  We have been at that point since GPU mining stopped being feasible in 2014, it’s just gotten worse. ASICs made it so the only people who could profit off mining were people who could place a wholesale sized order of hardware from bitmain, etc. Anyone else who claimed to be mining profitably was likely someone who was:
  
  buying old hardware 2nd hand (or new hardware at MSRP) and capitalizing on free electricity in their rental
  
  not selling their Bitcoin immediately (they weren’t making money from mining, they were making it from speculating)
  
  lived in Quebec and could double dip (North America’s cheapest grid + free heating for 8 months of the year)
  
  unless there’s a radical change in bitcoin’s algorithm
  
  The algorithm already does this though. Every 2016 blocks if it took more than 10 minutes per block, the difficulty of mining bitcoin goes down, not up. This is why every halving event you see a radical drop in difficulty, because at a given kWh you are producing half as many bitcoin - meaning people turned off their miners because it’s less profitable. The flipside is the rate of issuance goes down, so there is a lower inflationary effect, and the price of Bitcoin usually also skyrockets (which means eventually these miners re-enter, and difficulty eventually goes back to where it was). It can never get to a point where Bitcoin mining is completely unprofitable unless the price goes to zero, because there will always be a guy with a solar panel and fully paid-off hardware who can mine it for free. Granted, it can get to a point where a lot of people have to take a huge loss on capital expenditures if the price nosedives and never recovers
  
  source
Sibshops@lemm.ee ⁨3⁩ ⁨weeks⁩ ago
I don’t believe this is necessarily true. Miners like Riot Blockchain are operating at a loss and other people are stealing electricity.

source
- bjorney@lemmy.ca ⁨3⁩ ⁨weeks⁩ ago
  
  Miners like Riot Blockchain are operating at a loss
  
  I’m not a finance wizard, but I peeked at their last SEC filing, and first 3 quarters of 2024 they posted a 35m operating loss, but added almost 900m worth of assets to their balance sheet (mostly Bitcoin), which to me tells a very different story
  
  source
  - Sibshops@lemm.ee ⁨3⁩ ⁨weeks⁩ ago
    That’s because they diluted their stock and sold it.
    
    source
Vent@lemm.ee ⁨3⁩ ⁨weeks⁩ ago
There is nothing in the algorithm tied to BTC price. Sure, you’ll likely tend to get less miners as the price decreases, but that doesn’t guarantee that it’s profitable. Plenty of people, organizations, governments, etc do things that aren’t immediately profitable and may never be.

source