After the halving of Bitcoin earlier this year, Bitcoin mining has become very unprofitable for early adopters, as stated by a September report by NFT Evening.
For example, in order to mine a single Bitcoin in Ireland today, people will need to pay out $321,112; in Iran, however, that same process will set you back $1,324.
The U.S. may have been the biggest BTC mining hub in the world, but U.S. miners are experiencing a 50 percent loss in operating costs when the price of BTC drops to $57,909, like it did last month.
Bitcoin Mining Faces Global Challenges
Made by someone known only as the pseudonymous Satoshi Nakamoto on a proof of work consensus model, Bitcoin requires interaction by participants to solve complex mathematical problems in exchange for a block reward. Issued in BTC , these rewards allow new tokens to circulate until there is no longer a total supply of 21 million.
And ironically, it’s still quite profitable to mine Bitcoin in countries that ban it. There are more than 20 Asian countries that have tenure energy pricing systems that are positive for miners.
Similarly, the cheap energy costs in countries such as Ethiopia, Sudan and Libya have made them attractive to solo and institutional miners in Africa.
At the same time, Europeans have been hard hit by rising energy tariffs to the point that mining Bitcoin has become increasingly difficult. In Germany or perhaps the U.K. it would take you five times the market value of BTC to mine just one BTC using that currency.
The $2 billion Bitcoin mining industry has felt the effects of this year’s halving, which happens every four years. The halving is essentially half of the block reward, so the amount of new BTC entering circulation gets reduced, making the work of mining new BTC more and more difficult, or more profitable for the miners.
Institution miners have also struggled with the changes. Just weeks after the halving, in May, BTC miner Stronghold even contemplated selling its business as the industry adapted. Since then, rival Bitfarms has expressed interest in acquiring Stronghold to add its mining capacity.
