By Back in 2017 mining was all the rage. You got yourself a mad setup, and let it do the work and reaped the Bitcoin benefits. New research has revealed, however, that will the price of BTC is about 40% higher than a year ago with miners breaking records in terms of revenue of up about $4.7 billion this year.
That’s pretty marvelous though, right? Well not really, if one considers the increased competition in mining and computing power required to mine these factors have made BTC mining notably less profitable than ever before. Smaller mining firms now suffer as a result while the larger firms reap the rewards.
Energy & Equipment Costs.
China seems to be one of the few remaining countries which offer retail energy price packages which make perfect sense for those interested in bitcoin mining, with the cost being at a midpoint of $0.08 per kWh according to recent research. That’s one cost. Smaller firms still need to consider rent, salaries, equipment and many other overhead costs which could result in smaller, more amateur mining firms closing their doors.
All these factors contribute to a market situation wherein the larger mining pools survive while smaller ones don’t. Bitmain is one such larger mining enterprise and the company recently released data revealing that they are more dependent on sales from their Antminer ASIC mining devices than anything else with 95% of their H1 2018 revenues coming from miner sales.
This data released by Bitmain also revealed that their mining strategy is exactly in-line with their sales strategy for mining units. According to recent research by Diar, Bitmain’s 11 mining facilities in China along with soon to be opened facilities in Tennesse, Texas and Washington State could possibly see the company position themselves as a swing producer and thus controlling a notable amount of the bitcoin blockchain hashrate, their ultimate goal is to ensure that mining profits remain significant for all miners. As miners make money, they are more likely to purchase more mining equipment.
Bitmain’s mining pools remain pretty profitable as a by-product of this, which is great news for their upcoming North American operations which will, of course, be notably more expensive than that of their Asian bases of operations in China due to inflated energy costs.
The Diar report revealed this about the current state of the BTC mining market at present:
“It’s unlikely then that the recent tapering out of the Hash power to last. With big mining operations on low electricity costs running at anywhere between 50-60% gross profit from Bitcoin revenues, the market has a lot of room left to grow and, profits to squeeze. But Bitcoin mining has, at least for now, and most likely in the future, moved into the court of bigger players with deep pockets.”
Could the age of the amateur miner be over? Let us know your thoughts.
To read the full Diar report follow this link: https://diar.co/volume-2-issue-40/
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