Open Menu
AllLocalCommunitiesAbout
lotide
AllLocalCommunitiesAbout
Login

Bitcoin mining is no longer profitable

⁨191⁩ ⁨likes⁩

Submitted ⁨⁨3⁩ ⁨weeks⁩ ago⁩ by ⁨Hirom@beehaw.org⁩ to ⁨technology@beehaw.org⁩

https://www.pcworld.com/article/2767705/bitcoin-mining-is-no-longer-profitable.html

source

Comments

Sort:hotnewtop
  • 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
    • 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
        • -> View More Comments
    • 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:

        1. buying old hardware 2nd hand (or new hardware at MSRP) and capitalizing on free electricity in their rental
        2. not selling their Bitcoin immediately (they weren’t making money from mining, they were making it from speculating)
        3. 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
        • -> View More Comments
    • 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
  • marius@feddit.org ⁨3⁩ ⁨weeks⁩ ago

    You mean getting paid for using energy is not a working business model? Was about time that the market found that out

    source
    • henfredemars@infosec.pub ⁨3⁩ ⁨weeks⁩ ago

      Turns out the giant earth heater wasn’t the best business concept.

      source
    • technocrit@lemmy.dbzer0.com ⁨3⁩ ⁨weeks⁩ ago

      You mean getting paid for using energy is not a working business model?

      It’s literally every business model.

      source
    • Hirom@beehaw.org ⁨3⁩ ⁨weeks⁩ ago

      Given the current price of bitcoin, I suspect the marking still doesn’t know.

      source
    • Midnitte@beehaw.org ⁨3⁩ ⁨weeks⁩ ago

      Mostly due to the fact that mining bitcoin becomes harder as more and more are found, and the “worth” of that work no longer exceeds the cost in electricity to do so.

      In the past, it was basically free money, especially with how volatile it’s value is/was

      source
      • GregorGizeh@lemmy.zip ⁨3⁩ ⁨weeks⁩ ago

        To this day, I have not understood what exactly is even being calculated, and for what real world application. I mean, I understand mostly what crypto is and how it works, but not why doing those calculations results in financial gain.

        source
        • -> View More Comments
  • hperrin@lemmy.ca ⁨3⁩ ⁨weeks⁩ ago

    By design, it’s supposed to be barely profitable, so it makes sense it would cross that boundary once in a while. Then some miners stop, the difficulty is adjusted automatically, and it becomes profitable again. It’s actually a pretty interesting strategy.

    Basically the difficulty depends on how many miners there are on the network. More miners = more difficult. Fewer miners = less difficult. The “difficulty” is just how “lucky” you have to be to hit a successful hash on a block. The block’s hash is based on the previous block + all the transactions you include in your block + a random number you add. If the hash ends in a certain number of zeroes, you have a successful block you can add to the chain, and you’re rewarded with some brand new coin in your wallet (you include that in the transactions in your block).

    The amount of new coin constantly goes down as the chain gets longer, until it hits zero and mining doesn’t create new coin. Then, you would charge a fee for including someone’s transaction (a lot of miners already charge a fee). The more zeroes required at the end of the hash, the “harder” it is to mine. The network automatically adjusts how many zeroes are required to keep new blocks being added at a roughly constant rate.

    So, fewer miners would mean blocks are being added too slowly at the current difficulty, and the network adjusts to make it easier to hit a successful hash.

    source
    • Hirom@beehaw.org ⁨3⁩ ⁨weeks⁩ ago

      Thanks for the refresher. I’m aware of the basics, but assumed the difficulty measured by the number of zeros could only increase. Apparently difficulty can decrease, and I’ve read it’s expected to decrease very soon to keep the system running a while longer.

      Bitcoin’s creator was smart enough to design a system that automatically adjust to remain profitable for several years without intervention, but not smart enough to foresee social and environmental costs.

      It’s a good example that illustrate why automated systems shouldn’t be left running unsupervised, even if it’s designed by the best of minds with the best of intentions.

      source
      • The_Caretaker@lemm.ee ⁨3⁩ ⁨weeks⁩ ago

        There are other methods of operating a blockchain, besides proof of work, which are much more energy efficient. Think of Bitcoin being like a coal fired power-plant and some other cryptos based on proof of stake being akin to solar panels.

        source
        • -> View More Comments
      • locuester@lemmy.zip ⁨3⁩ ⁨weeks⁩ ago

        It’s a good example that illustrate why automated systems shouldn’t be left running unsupervised, even if it’s designed by the best minds with the best of intentions.

        The network is constantly supervised and mining is a competitive business. The network was built to adjust, and is working precisely as intended.

        source
        • -> View More Comments
    • Oka@sopuli.xyz ⁨3⁩ ⁨weeks⁩ ago

      Wouldn’t it be easier if a bunch of people paid a dollar every second, and one of those people was randomly selected to get every dollar submitted?

      source
      • FiskFisk33@startrek.website ⁨3⁩ ⁨weeks⁩ ago

        it would, but the act of giving a dollar doesn’t double as a way to validate transactions

        source
    • humanspiral@lemmy.ca ⁨3⁩ ⁨weeks⁩ ago

      Also a clue from one of the links is that “German industrial rate customers, cost is $200k/btc”. Their industrial rate is $0.25/kwh, and so then their claim is based on 12c/kwh utility rates. Utility rates has pretty much always been cost prohibitive. Wholesales and behind the meter power is certainly an advantage large scale mining uses.

      source
  • kittenzrulz123@lemmy.blahaj.zone ⁨3⁩ ⁨weeks⁩ ago

    Image

    source
  • kittenroar@beehaw.org ⁨3⁩ ⁨weeks⁩ ago

    bitcoin mining hasn’t been profitable for a long time.

    source
    • Boomkop3@reddthat.com ⁨3⁩ ⁨weeks⁩ ago

      …but you could buy specialized hardware for it

      source
      • kittenroar@beehaw.org ⁨3⁩ ⁨weeks⁩ ago

        True, but the outlay of cost for the hardware was higher than the value of Bitcoin you would receive.

        source
        • -> View More Comments
  • mctoasterson@reddthat.com ⁨3⁩ ⁨weeks⁩ ago

    It remains profitable for scammers who use malware botnets consisting of other peoples computing power and electricity.

    source
  • psx_crab@lemmy.zip ⁨3⁩ ⁨weeks⁩ ago

    Not if you outright steal the electricity.

    source
    • comfy@lemmy.ml ⁨3⁩ ⁨weeks⁩ ago

      I remember a thread where someone had put a mining rig inside a hotel or apartment’s cleaning room and was running it off the stolen electricity.

      source
  • some_guy@lemmy.sdf.org ⁨3⁩ ⁨weeks⁩ ago

    Finally.

    source
    • DragonTypeWyvern@midwest.social ⁨3⁩ ⁨weeks⁩ ago

      It’s actually been that way for years outside of places with subsidized/corrupt pricing.

      source