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Bitcoin profitability has no role to play in the concentration of mining


Bitcoin mining is expensive as it is but the upcoming BTC halving seems to be a huge challenge for the miners. As estimated by the crypto-focused research firm TradeBlock, the average cost to mine a single bitcoin (BTC) could jump to $12,525. As a result, the miners might have to run extra computations, which results in extra use of electricity, in turn resulting in increased electricity charges. This has raised concerns among the community around the profitability of bitcoin mining. ‘Are big mining firms more profitable when compared to the small mining firms?’. ‘Will this lead to the concentration of mining?’. Bitcoin advocate Andreas Antonopoulos is of the opinion that profitability cannot lead to the concentration of mining. In a recent video, Antonopoulos also noted that profitability, in the long term, does not just depend on the economies of scale. During the halving, the least efficient miners shut down the machines fearing the high electricity charges which leads to the difficulty reduction. As a result, the miners who were in the unprofitable zone earlier are able to get back on track and make profits. Read More...