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Bitcoin

Bitcoin Mining Costs Surge Beyond Profitability Threshold (pcgamer.com) 91

Posted by msmash from the how-about-that dept.
Bitcoin mining has crossed a critical economic threshold, with costs now exceeding market value for most operators. According to data cited by CoinShares, large public mining companies spend over $82,000 to produce a single Bitcoin -- nearly double last quarter's figure -- while smaller operations face even steeper costs of approximately $137,000 per coin.

With Bitcoin currently trading around $94,703, the math no longer works for most miners. The economics become particularly challenging in high-electricity-cost regions like Germany, where mining a single coin requires approximately $200,000. Industry analysts suggest larger mining operations are adapting by optimizing energy consumption and positioning their computational infrastructure for alternative uses. These companies can potentially lease their mining setups for other computational tasks during unprofitable mining periods, then resume mining when market conditions improve.

For individual miners, however, the era of profitable home operations appears effectively over, as industrial-scale facilities with strategic positioning and optimized technology have fundamentally altered the mining landscape.
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Bitcoin Mining Costs Surge Beyond Profitability Threshold More

Bitcoin Mining Costs Surge Beyond Profitability Threshold

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  • Just come to Texas... (Score:1, Funny)

    by Anonymous Coward

    Texas is a state where ERCOT pays BTC miners to -not- mine coins when power demand is at peak.

    BTC will likely be at $250,000 a unit in a month or so anywhere, so these concerns are unfounded. It is also 100% secure, and cannot be attacked by quantum factorization, so between that, and it being a deflationary currency, it only will go up over time.

    • Re: (Score:2, Informative)

      by Anonymous Coward

      >BTC will likely be at $250,000 a unit in a month or so

      LOL!!!!

      Want more LOLs @ Pyrite Pete shitposts? Here are but a sample:

      "It is pretty much a given that BTC will be up to 100,000 USD in a few months, if not by the end of [2022]." [slashdot.org] - LOL!
      "We will be having the same discussion when it gets to $100,000 later [in 2022]" [slashdot.org] - LOL!
      "[Bitcoin is] only going up in value" [slashdot.org] - this after it had fallen back down to $26K at the time - LOL!
      Jan 9 2024: "[Bitcoin is] likely going to 50k by the weekend" [slashdot.org] - LOL! (gee, what happened to it going to 100K in 2022 Pyrite Pete [imgflip.com]

      • It is infuriating to me that a post I mostly agree with appears to have been written by APK, sans signature of course.

        • Re: (Score:2)

          by tragedy ( 27079 )

          Whatever happened to Alexander Peter Kowalski anyway? Have not seen him around in a while.

      • So "Pyrite Pete" == "Adrian Dittman" a.k.a. Elon Musk?

        I mean, constant strings of incorrect predictions that result in more incorrect predictions based on the "trust me bro, any minute now..." factless belief structure seems a little too coincidental...

      • Re: (Score:2)

        by GuB-42 ( 2483988 )

        The be fair to these posts, BTC eventually reached $100k and on average for the last 5 years progressed a lot more than the global market. So maybe these predictions were optimistic on the time frame, but I am not going to call "LOL!". Baseless or not, those who bought based on these predictions made money.

        I am just looking at the charts, I have no skin in this game and I don't intend to. Will it exceed $250k one day? Maybe, maybe not, maybe it will crash, but $250k in a few years is not out of the question

        • Re: (Score:1)

          by Anonymous Coward

          So maybe these predictions were optimistic on the time frame

          "optimistic" = shitposting to induce FOMO, because it's a scam

    • For bitcoin to go to $250k in the near future, we will probably be at war with someone, or ourselves. Either the value of the USD needs to go down, or crypto needs more money. I don't see more money getting into crypto.

      • For bitcoin to go to $250k in the near future, we will probably be at war with someone, or ourselves.

        Not quite. Bitcoin only works if the Internet, which is largest and most complex mechanism that humankind has ever produced, is functioning normally.

        Once a major conflict breaks out, the Internet ends, both by sabotage and by government edict. Bitcoin's value then becomes $NaN.

        • Unfortunately at this point if the internet goes away so does the value of just about every major currency. It isn't like the bank has a stack of dollar bills sitting around.
          • Absolutely. The last time there was a major conflict we weren't wire transferring money from bank to bank though ACH. At best the closest thing to that back then might have been money orders though western union. Banks aren't sitting on a mountain of cash. They have enough on hand for at most a couple days of NORMAL transaction volume. If we loose internet and telecom then there isn't going to be any transactions happening at banks. Its unlikely that branches have local cached copies of every account holder

        • and when bitcoin traffic is blocked at stuff like an China firewall spitting it into differnt zones?
          An war forces power used on it to be cut?

      • Re:Just come to Texas... (Score:4, Informative)

        by Targon ( 17348 ) on Tuesday April 29, 2025 @02:35PM (#65340565)

        Trump is clearly working to kill the economy and value of the US Dollar, so that may work out.

    • I'm going to propose to my California legislature a similar arrangement. Crypto miners will not be sent to prison if they simply avoid mining during peak times.

    • 51% hacks can be done as well spilts

    • Not only will ERCOT pay BTC miners to -not- mine coins, they pay up to 30X normal rates during "power emergencies". So in the summer, a BTC miner can turn off for one hour in the late afternoon and come out ahead for the day on their electric bill.

  • Maybe this will finally kill the cryptobeast once and for all. Nah, who am I kidding.

    • Maybe this will finally kill the cryptobeast once and for all. Nah, who am I kidding.

      Mining hardware becoming obsolete due to profitability is an entirely expected thing, and the number of miners going up and down is planned for in the design.

      • Maybe this will finally kill the cryptobeast once and for all. Nah, who am I kidding.

        Mining hardware becoming obsolete due to profitability is an entirely expected thing, and the number of miners going up and down is planned for in the design.

        Sure. But did they calculate in the entire network grinding to a gridlock halt because there's no mining going on to process new transactions?

        • Maybe this will finally kill the cryptobeast once and for all. Nah, who am I kidding.

          Mining hardware becoming obsolete due to profitability is an entirely expected thing, and the number of miners going up and down is planned for in the design.

          Sure. But did they calculate in the entire network grinding to a gridlock halt because there's no mining going on to process new transactions?

          That's the "number of miners going down" part. When that happens, the mining difficulty is adjusted downward so mining is more profitable and more people start mining.

          The whole thing is a terrible idea in virtually every way, but its design is reasonably robust.

    • Maybe this will finally kill the cryptobeast once and for all. Nah, who am I kidding.

      A subset of humans have been susceptible to "get rich quick" schemes for at least as long as recorded history has existed. The only thing that can kill off cryptocurrency is a newer, shinier grift.

  • I don't think this article was really worth posting.

    The article doesn't even provide citations for the cost factors cited, and it basically boils down to "I've known it all along!" but the author doesn't really understand what they're writing about. It's PCGamer, an article by a games author, dissing on bitcoin using no outside citation for the cost factors.

    i did a quick google search hoping to find some sort of source for the figures invented and couldn't find it. "German bitcoin $200,000" only google sear

  • Energy costs impact a great many things, I imagine (Score:4, Interesting)

    by MacMann ( 7518492 ) on Tuesday April 29, 2025 @01:19PM (#65340297)

    If energy costs in Germany is making Bitcoin mining no longer profitable there then what else is no longer profitable because of electricity costs? Or energy costs in general? By that I mean if there's some process that needs a lot of hot water, as an example, they they are not likely to care if that heat is from electricity, natural gas, or coal. If electricity costs are relatively high but natural gas costs are relatively low then they will switch out electric boilers for natural gas boilers.

    I wonder how the electricity production in Germany compares to nations with lower electricity rates. It would be interesting to see what it takes to get the lowest cost electricity. It's not likely to be any one source to dominate them all, at least that's how it would appear to me. It would likely be a mix of things. Some sources are low cost base load electricity sources, others low cost peak load sources, pick the best mix for daily and seasonal variations in demand and that should bring the lowest average cost to consumers.

    If Germany, and other nations with relatively high energy costs, can't keep their energy costs competitive then they can expect this cost to impact their economy. Bitcoin could just be the canary in the coal mine on this.

    • Re: (Score:3)

      by Tailhook ( 98486 )

      If energy costs in Germany is making Bitcoin mining no longer profitable there then what else is no longer profitable because of electricity costs?

      That's a deeply offensive question and you need to reconsider asking such misguided things.

      Germany and it's green kudos are not to be question by plebs like you. Stop it now.

  • Even back in the $30 btc days, mining was always done with the calculation of where the price will be in 1-5 years. It's NEVER been profitable at the individual level without the corresponding price increases.

  • So much for decentralization (Score:5, Insightful)

    by Holi ( 250190 ) on Tuesday April 29, 2025 @01:24PM (#65340323)

    Without miners there are no transactions processed. If only large players can mine, they control it all. And what happens when there are no more coins to mine and they have to exist on transaction fees? None of this looks good for the long term.

    • Re:So much for decentralization (Score:5, Insightful)

      by Zak3056 ( 69287 ) on Tuesday April 29, 2025 @01:54PM (#65340423) Journal

      Without miners there are no transactions processed. If only large players can mine, they control it all. And what happens when there are no more coins to mine and they have to exist on transaction fees? None of this looks good for the long term.

      I mean... every Ponzi scheme eventually collapses, why should this one be different?

      • Re: (Score:2)

        by mjwx ( 966435 )

        Without miners there are no transactions processed. If only large players can mine, they control it all. And what happens when there are no more coins to mine and they have to exist on transaction fees? None of this looks good for the long term.

        I mean... every Ponzi scheme eventually collapses, why should this one be different?

        But this is a ponzi scheme WITH A COMPUTER... that changes everything and shirley means it can never fail... Right? Guys? Right?

      • why should this one be different?

        Well, for one, it's lasted a LOT longer than I thought it would.

    • Re: (Score:2)

      by King_TJ ( 85913 )

      As far as I understood it, this was considered from the very early days of crypto. The long-term plan was always for mining for coins to dwindle into being unprofitable. The theory was -- the (by then established) e-currency would need people processing the transactions rather than trying to mint more coins. So in other words? It creates the business opportunity of charging fees to process it, just like credit card processors all do today.

      That means yes -- you'll start paying a little more to do a bitcoin t

      • The plan all along was to shift the burden of transaction processing from holders of btc (via inflation) to users of btc (via transaction fees)? Sounds like a systemic pump and dump to me.

      • Re: (Score:2)

        by ceoyoyo ( 59147 )

        Credit card processors can process a transaction at the absolute minimum it costs to update a database entry. Bitcoin transactions rely on the processing requiring enormous computing resources, too big for any reasonable attacker, which includes the largest nations on the planet, to dominate.

        But not sure it would be significant?

        You are very optimistic.

        • Re: (Score:2)

          by King_TJ ( 85913 )

          Optimistic, perhaps? But there's also the assumption in play that computing power keeps increasing with time, and what's called "enormous" today might be insignificant in a decade. The huge processing demands for all this AI stuff will surely drive some innovation in this space?
           

          • Re: (Score:2)

            by ceoyoyo ( 59147 )

            It doesn't matter. The security of a system based on proof of work requires that the work, here computing, be expensive. If you make the computing cheaper you just need more of it to maintain the same level of security.

            That's the insidious thing. Bitcoin mining would work just fine with legions of human computers working out the math with paper and pencil in pre-electronic computer times, or with IBM XTs in the 80s, or with planet sized supercomputers in the distant future. It doesn't matter how good your c

      • Re: (Score:2)

        by Holi ( 250190 )

        There are not enough bitcoin transactions to support it through fees. That idea was from the time they thought bitcoin would be a currency, but no one buys anything with bitcoin.

  • When mining is unprofitable, only transactions offering profitable fees will be processed in a timely manner, if at all.

    • This was Satoshi's design.

      There are supposed to be so many txns in a block by now that their tx fees would pay for the block mining at higher difficulties.

      When AXA/Bilderburg took over BTC they capped the block size at 2MB knowing that the economics would soon kill it. Here we are.

      That's why the chain hardforked and the Satoshi crowd went to the Bitcoin Cash chain after the NYC betrayal.

      The math hasn't changed since 2008.

      The NGU crowd has been playing musical chairs and arresting critics on novel legal theo

  • Bitcoin was intended to self destruct (Score:5, Interesting)

    by xack ( 5304745 ) on Tuesday April 29, 2025 @02:01PM (#65340447)
    Through multiple halvings and irreversible "lost coins" (unless you quantum your way through SHA256), all Bitcoin will eventually all be lost in the chain. While "2140" is the theoretical limit for the "end of bitcoin", for all practical purposes 20 years is the limit before too much gets lost. It was only meant to be a temporary system that spurs the development of more sophisticated digital currencies. But now all the original use cases have been hijacked by Scammers, Gamblers and North Korea. I'd rather people stop using bitcoin and focus on drug and economic reform to eliminate the use cases for crypto.

  • Inevitable? (Score:3)

    by Dan East ( 318230 ) on Tuesday April 29, 2025 @02:02PM (#65340455) Journal

    Isn't this inevitable for any cryptocurrency that is actually in use? If you can produce a thing cheaper then its value, then that will cause inflation until the thing's value reaches the cost it takes to produce. Especially when it doesn't require any special resources (beyond power, which is everywhere) or materials.

    When it comes to real-world products there are a host of limiting factors preventing just anyone from manufacturing, distributing and selling it, but that isn't the case with an artificial, virtual thing like a bitcoin.

    • Isn't this inevitable for any cryptocurrency that is actually in use?

      Only if it works on PoW and depends on mining for transaction processing.

  • Which is more valuable?

    A bitcoin, or $94,000 in electricity?

    • Re: (Score:1)

      by davidwr ( 791652 )

      Which is more valuable? A bitcoin, or $94,000 in electricity?

      That depends: What can I trade each of them for, and how much is the transaction going to cost me in fees, time, annoyance, and what-not?

      If I can trade each for 940 $100 bills in a quick, basically zero-cost trade, it's reasonable to say they have the same value.

      • Boy! Nothing gets past you, does it?

        I'll be more clear.

        What ELSE can you do with $94K worth of electricity, besides create a bitcoin?

        For example, at today's prices and my current usage patterns, I could power my house for about 19 YEARS! Compare that utility value (no pun intended) vs creating a "coin" to buy $94K worth of stuff instead of just paying with cash, credit card, etc. Put in those terms, it seems entirely wasteful to spend $94K that way.

        So what ELSE could you do with $94K in electricity? For e

      • The $94,000 isnt just in electricity. It's also the cost of the space the mine occupies, the cost of the hardware and maintaining or upgrading it. I haven't looked at the cost of mining hardware in some time. But I remember where a rig might cost a couple grand and you could expect over it's useful life plugged into your outlet at home it would probably consume about that much in electricity. so we're probably taking a 50/50 split in hardware vs electric costs. The economies of scale might have that ratio c

    • Re: (Score:2)

      by JeffSh ( 71237 )

      a freshly mined bitcoin is actually worth more than the spot price of bitcoin

    • Re: (Score:2)

      by AvitarX ( 172628 )

      The one I can store and sell is definitely worth more to me.

  • So we've all been told to conserve energy then they turn around and piss it away on grinding numbers for someone's money making scheme that produces nothing for society.

    • Re: (Score:2)

      by JeffSh ( 71237 )

      every 10 minutes bitcoin produces around $300,000 in economic value. if it weren't, the price of bitcoin would adjust appropriately.

    • Don't worry, 'ai' has the (py)torch now and will beat any energy wasted for mining by many orders of magnitude.

      I'm too lazy to look, but has an energy consumption comparison been made between that consumed/lost to mining vs artificial incompetence?

  • Isn't this the way it's meant to be, if the coin mining was highly profitable, it would cause hyper inflation of the coin.

  • That isn't how this works (Score:3)

    by UncleScidhuv ( 7657782 ) on Tuesday April 29, 2025 @03:07PM (#65340653)
    As miners can not make money they stop mining. The number of miners reduces and the difficulty of mining adjusts downward. It is part of the system. Almost like someone thought about it when they designed the system.

    • Yes, mining should adapt. That's not a problem. This just exacerbates one of the main problems with mined coins, that they're largely centralised. Bitcoin was purported to be "the people's coin", that would be distributed and mined by anyone. This hasn't been true for a while, and this just shows that the problem is getting worse, as was expected. In the end it will be a very valuable coin with very few heavily centralised miners, which will be an easy target for attack. That's an inherent problem in mined

  • In the olden times, there wasn't much gold in Germany either.

  • Where's my popcorn? Time to watch all the tearjerkers starting major crypto bros.

  • Then energy is way, way too cheap.

  • Didn't matter, they were dead anyway. (Score:3, Insightful)

    by Truekaiser ( 724672 ) on Tuesday April 29, 2025 @07:05PM (#65341237)

    Everyone is ignoring the elephant in the room that would've killed bitcoin and crypto in general.

    ->Nothing gets deleted from the blockchain-

    Means as time goes on, more transactions are made, more people use it. The LESS people can host the blockchain. This will happen when it goes from tens to 100's of gigabytes to over a terabyte. With less people on the network due to this. the longer it will take to clear transactions. Which are already too long for 'any' reasonable form of currency.

    Oh sure it could still cling to life from dedicate users, but eventually the storage requirements would even outpace individuals.

  • I never understood what exactly a bitcoin is other than a receipt for computational resources consumed and I am still shocked that a market for them exists.

  • I upgraded my video card recently. I need four DisplayPort outputs so I picked a Nvidia RTX A2000 (old generation, not Ada). The prices on ebay.co.uk looked good value. Then I looked at the seller, and he had about a dozen of these cards for sale. I guess Bitcoin or crypto mining costs have reached some threshold where these cards no longer make money.

    (The A2000 is a power-limited card drawing only 70 watts, intended for workstations, but I guess that might also make it suitable for mining.)

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