The days of lucrative Bitcoin mining are over

The days of lucrative Bitcoin mining are over

Since the Bitcoin price gets stalls and the mining difficulties rise, it falls crypto enthusiasts who once took a pretty cent from mining home garages to reach the profit threshold.

MINING BITCOIN at home is much more challenging today than in the early days of crypto. Mining equipment is expensive and electricity is not cheap either, and the number of people who are ready to risk an investment in Bitcoin mining operations has shrunk.

"The demand went back very, very strongly in June," said Lauren Lin, operations manager at the mining pool Luxor. "However, the demand increased at the beginning of August because the Bitcoin price has risen somewhat since the decline in June and more hosting sites went online."

hosting sites are data centers in which Miner can store and operate their equipment for a fee. The infrastructure associated with Bitcoin mining to be at least profitable is considerable, said Lin.

"To mine at home, not only the capital is needed to buy the ASIC [Application-Specific Integrated Circuit Rig] You have to know how to ventilate, you have to know how to deal with the noise and the heat, there is a lot to consider," said Lin.

profitability primarily the main concern of most miners, and lately it has been more difficult to make profits. More and more initial minutes have bought S9 mining units, an older model that does not produce enough Bitcoin to compensate for electricity costs.

"I will say, at least for our customer base, that the people who do this have the main purpose of testing how the mining works," said Lin. "If you dismantle with electricity tariffs for private households at home, an S9 is not profitable at all, but you would gain some experience."

Bitcoin mining at home No problem for large companies

companies that absolutely want to benefit from crypto demand are also on the rise and have further advanced garage-based operations.

"The big boys play hard and apply several strategies to make profit with their locations," wrote Sam Doctor and David Bellman, mining researcher from the analysis company Bitooda, recently in a message.

The "big boys", ie the large companies that have entered the mining area in recent years, diversify their sources of income to withstand the difficult market conditions. Stronghold Digital Mining, listed on the Nasdaq, has sold electricity to the network - and its mining machines - to cover debts.

Other companies have completely switched. Bitcoin-Miner in Rochester, New York, have put a shut-down power plant back into operation to create new cryptocurrency.

The private equity company Atlas Holdings bought Greenidge Generation in 2014 and switched the coal-fired power plant to natural gas. In 2021, the company began to use the electricity generated to dig Bitcoin. In New York there are now laws that are to prevent new companies from falling back on fossil fuels.

There was also a geographical shift, Lin added, especially after China's ban on mining companies. Mining The activity has increased across Europe and South America, said Lin.

"We have been observing that more and more South American miners have been expanding," said Lin. "They bought a very old generation from ASICS around the time of the China mining ban, now they are changing the latest generation of ASICS."

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The contribution The days of the lucrative Bitcoin Mining at home are over is not financial advice.