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Bitcoin mining is no longer a profitable option for emerging crypto miners
The cryptocurrency Bitcoin has become more popular than its creator Satoshi Nakamoto had ever imagined. With its rising popularity, the number of computers, i.e., miners participating in its peer-to-peer network keeps increasing too, eventually leading to Bitcoin mining difficulty. Bitcoin mining difficulty has been on the rise since the beginning of 2022. Miners are continuing to compete with each other over the block making the functionality of the BTC network even more challenging and causing numerous glitches. When miners start to compete on the network, their hash, and processing power increase too. As the broader market is in turmoil, the Bitcoin price is challenged and with Terra’s sudden fall, more and more investors are leaving the market to choose a more centralized and stable asset. Amid this volatile condition of cryptocurrency, miners’ greed has made things worse. Now that the Bitcoin mining revenues have fallen, they are planning on leaving the network and selling their tokens.
Bitcoin mining has been a profitable source of earning for those who do not wish to directly invest in cryptocurrency. In recent research conducted by crypto analysts, they found that Bitcoin mining is a highly concentrated business. Generally, the mining rewards are quite disproportionately distributed among the miners. To get more into the Bitcoin mining difficulty specifics, it has been reported that the concerns grew immensely since March 28, 2022, which was around 27 trillion compared to 13 trillion at the end of 2021, indicating a rise of about 13.6%.
The Rise of Bitcoin Mining Difficulty
Even though Bitcoin is one of the most influential cryptocurrencies in the market, its mining procedure is still the most controversial topic in the industry. Currently, almost every BTC investor is aware of the Bitcoin price fluctuation, which is one of the darker sides of BTC. Even after BTC’s influence in the market, the crypto has not failed to garner attention from the global media. Earlier in April 2022, experts had predicted that Bitcoin mining will continue to increase and might adversely impact the cryptocurrency market in 2022. Government authorities have been requesting crypto industries to look for alternate means to create more digital tokens, including changes in mining methods. Further changes would need an appropriate registration of mining data centers.
Since Bitcoin mining difficulty increased, miners are migrating towards Ethereum due to its greater return on investment. Mining Ethereum became even more profitable when the crypto crossed the US$4,000 in 2021. Currently, the ETH 2.0 upgrade is nearing its launch, which is making it even more difficult for Bitcoin to maintain its stature in the crypto market.
Miners are dumping their tokens!
Recent reports have revealed that a significant number of Bitcoin miners have gained profits through the bear market. Since the market turned and Bitcoin fell exponentially, it has become even more complicated for miners to hold these tokens. This has resulted in several Bitcoin mining companies to have forfeited or selling off their BTC holdings.
Marathon Digital, which is one of the most important companies in the Bitcoin mining domain has sold off its Bitcoin holdings. The company held over 9,600 BTC tokens over the past two years. Several other crypto companies like Riot and Cathedra Bitcoin have also sold off their holdings. But experts predict that it is not just crypto companies, even major global companies will also progress towards selling off their Bitcoin holdings.
According to reports, Bitcoin mining still remains profitable, but it has considerably declined, with the price trading at over 50% from its all-time high. Miners and investors are losing their faith in Bitcoin mining stocks; hence, it is making miners even more anxious to continue mining in BTC’s network.