State of Bitcoin Mining: Nearly $5 Billion Earned in 2018, but Difficulty vs Profitability is Tightening
Bitcoin Mining Loses Its Spark as It Brings Less Profit Over Time
A research conducted by Diar has provided visual evidence that the usual profits earned through mining bitcoin is gradually decreasing. The main causes at the moment include increased electricity costs, payments done at retail rates and hashing rate dominance, which the Chinese supposedly excel at.
Based on Crypto Slate’s report, which also looked at the problem at hand, China’s mining profile is beneficial because of its $0.04 kW/h wholesale price, with twice the rate applicable to retail customers. Although the country is known for placing limits on cryptocurrencies, it is deemed the ideal location to set up crypto mining farms, giving them the competitive edge. This being said, considering the costs for operating a farm, it still remains a tough situation.
As of this year, Bitcoin miners have successfully earned nearly USD$4.7 billion, which is still significant. By breaking down the specs, you’ll see that Bitcoin miners typically earn approximately USD$350 million (or 54,000 BTC) monthly with additional revenue made in the form of transaction fees.
When combining high hash rate and the attraction Bitcoin has gained over time, revenues have surely gone up. In particular, in 2018 alone revenues increased by approximately $1.7 billion. However, the same cannot be said about net revenue.
According to the Next Web – who referenced Diar’s findings – the largest mining pool operator, Bitmain will face a situation in which it has no other choice but to control the Bitcoin hashing power between countries, to ease electricity costs, otherwise it will be faced with reduced profits. This will be witnessed as early as the first quarter of 2019, as Bitmain plans to open three crypto mining firms.