It is now unprofitable for all but the most advanced crypto operations to mine Bitcoin in the United States.

Since Bitcoin’s inception in 2009, the amount of energy required to mine has always been less than the amount of Bitcoin you got for mining. But that was never going to last; there was a limit of 21 million possible Bitcoins baked into the system from the jump, and the rate of new coins mined has gotten slimmer as competition has increased, making the economics worse and worse over time.

These days, one Bitcoin trades for around $94,000, but costs about $137,000 in electricity for small-scale operations to mine, making new coins an economic liability for all but the largest players. For those whales, Gizmodo estimates the most optimal cost for mining a bitcoin at around $82,000 — slim margins which are shrinking fast.

Right now, the top 8 percent of crypto wallets own a little under 99 percent of all Bitcoin in circulation. Zooming in even farther, we see that the top 1 percent of crypto wallets control over 90 percent — so much for all that decentralization that Bitcoin was supposed to represent.

  • deafboy@lemmy.world
    11·
    2 days ago

    If nothing else, bitcoin has made me aware of how bad the tech journalism is in general.

    Go reasonably deep into something, anything, and than read a news article about it. Sobering experience.

  • bjorney
    24·
    3 days ago

    Title doesn’t match the text

    one Bitcoin trades for around $94,000

    $137,000 in electricity for small-scale operations to mine

    optimal cost for mining a bitcoin at around $82,000

    So really it should just say “mining bitcoin only profitable at scale in areas with cheap electricity” which has always been true to a degree

  • chicken@lemmy.dbzer0.com
    102·
    2 days ago

    It’s self-adjusting isn’t it? The more people mining, the smaller share of the pie you get? It isn’t very meaningful then to say how a particular electricity price compares to the Bitcoin price for profitability. That isn’t much of a metric for the strength of the network. I feel like a better measure would be something like, the bitcoin marketcap divided by current hash rate; how much computing power is available to protect the network relative to how much value it is protecting. I’m kind of skeptical they will be able to keep that one up given that block rewards are going to decline and stop entirely to assure the 21 million, and actual use of Bitcoin for transactions is discouraged so potential fee revenue is limited.

  • infinitesunrise@slrpnk.netEnglish
    112·
    3 days ago

    1. These are US electricity prices. Where in the US? They don’t say. There are miners in the US who get their electricity for “free” ie they generate it from waste heat or waste gas. So this is de facto a cherry picked number.

    2. Most bitcoiners believe that the value of bitcoin will continue to rise in the future as it has for the past 14 years. A $137K bitcoin today could be an insane bargain in several years. Also “untainted” coins - Coins that haven’t passed through other wallets yet - Generally trade at a slight premium as there is lower risk of them being confiscated by governments in the future for having passed through the hands illegalized owners.

    3. No shit bitcoin is concentrated in a few holders. It’s money, under capitalism. The author conflates communist-style distribution of value with the decentralized administration of the network itself. This is like saying that Lemmy isn’t decentralized because the majority of posts come from 1% of users. There’s no way that rhentorical switchup was accidental, that is a misleading and disingenuous writing choice.

    I’m as happy as anyone to criticize bitcoin, but this is trashy clickbait.

      • infinitesunrise@slrpnk.netEnglish
        1·
        2 days ago

        Yeah, if you’re actually paying that much and untouched coins are of no benefit to you then you’d probably pull the plug. Any rational miner in the US still chugging away right now is obviously not losing money according to their business plan or they’d shut off.

  • Psythik@lemm.ee
    13·
    2 days ago

    Yeah but at least it’s holding its value, unlike USD right now.

    Edit: You crypto haters are so fucking annoying. Check the price if you don’t believe me.