Bitcoin miners are losing on every coin produced as difficulty drops • Hacker News Board

Re: Bitcoin miners are losing on every coin produced as difficulty drops

#131

Post by superjan » Sat, Apr 11, 2026, 5:13 PM UTC

tgsovlerkhgsel wrote: post #97

Geee wrote: post #94

No one is producing Bitcoin at loss, because it doesn't make any sense, but it might happen temporarily. Imagine the mining cost as a distribution curve, and bitcoin miners filling the distribution from the cheapest upwards to where the cost equals the revenue, i.e. the highest cost miner is at break-even, so that total of 3.125 (+transaction fees) bitcoin worth of hashrate is produced every 10 minutes. All but the h…

> No one is producing Bitcoin at loss, because it doesn't make any sense The cost of producing bitcoin is a combination of the marginal cost (running the miner you already have, i.e. mostly power) and paying for the miner that you bought. If you buy a miner expecting a certain profitability but then the economics change, you can both end up with a loss long term (never able to recoup the cost of the miner) and still…

Both of you are right. There is one more edge case: if you commit to buying electricity in advance it might cost you extra to not consume it. It would still be in your interest to use the power at a net marginal loss rather than not using it and paying a fine for failing the contract.

Re: Bitcoin miners are losing on every coin produced as difficulty drops

#132

Post by bombcar » Sat, Apr 11, 2026, 5:23 PM UTC

embedding-shape wrote: post #26

Aperocky wrote: post #14

Earlier quoted context omitted.

This only works when the difficult drop rates are below miner leaving rates. Which in normal times, are something taken for granted, but once it does happen, the edge case collapse the entire system. edit: the earlier language is not exact, the scenario is an exponential drop of value that results in exponential drop in miner willing to mine until this discrepancy can be resolved. i.e. the system is not protected aga…

> but once it does happen, the edge case collapse the entire system. Which is when exactly, and how likely is that to happen? It hasn't happened yet in ~14 years, but I guess "never say never". There is a lot of money saying it won't happen very soon though.

It's also a side-effect of apocollapse of bitcoin itself; it becomes worth so little that nobody is mining means nobody will mine to a new block difficulty; but the collapse already occurred.

Re: Bitcoin miners are losing on every coin produced as difficulty drops

#133

Post by kibwen » Sat, Apr 11, 2026, 5:24 PM UTC

chistev wrote: post #76

didgetmaster wrote: post #67

Earlier quoted context omitted.

It sounds very similar to things like oil production, gold mining, and even farming. When the price is high, everyone wants in on the action. As supply explodes, the prices drop. Once prices get low enough, the costs to pump the next barrel of oil, find the next ounce of gold, or harvest the next acre of a certain crop; exceed the reward. When that happens, wells are shut down, mining operations suspended, and differ…

Satoshi thought of everything, man.

Except for the inevitable and obvious fact that proof-of-work creates a self-sustaining primary incentive for energy waste more pernicious than has ever been seen in any other financial or commercial enterprise, obliterating any hope of having energy that is too cheap to meter.

Re: Bitcoin miners are losing on every coin produced as difficulty drops

#134

Post by Groxx » Sat, Apr 11, 2026, 5:27 PM UTC

ziml77 wrote: post #130

luke5441 wrote: post #129

Earlier quoted context omitted.

Depends on if you see the use case of censorship resitant payment as something we should allow or not (such as paying the Ayatollah to go through the strait). I for one don't.

But even of you do see the use, why not proof of stake rather than proof of work?

It's far less studied and didn't exist (to any usable degree) at the time it was made. And it's extremely different, organizationally, so it's a difficult migration to pull off. And it has different incentives. And most miners have a lot of costs (e.g. hardware) that won't be recoverable if it's changed, so there's a fairly strong incentive to not change it.

Ethereum uses proof of stake now though (since 2022). Which happened in part because Ethereum is effectively centralized, or at least significantly more-so than Bitcoin.

Re: Bitcoin miners are losing on every coin produced as difficulty drops

#135

Post by TacticalCoder » Sat, Apr 11, 2026, 5:36 PM UTC

dmk wrote: post #7

The headline is dramatic but this is literally how bitcoin is designed to work. Miners leave, difficulty drops, costs go down, mining becomes profitable again. The interesting part isn’t the loss per coin, it’s how long the lag between unprofitable mining and difficulty adjustment keeps forced selling pressure on the market.

> The interesting part isn’t the loss per coin, it’s how long the lag between unprofitable mining and difficulty adjustment keeps forced selling pressure on the market.

I follow Bitcoin from a theoretical point of view and I find it fascinating.

Something that boggles my mind a lot is this: Bitcoin, which is somehow a bit "programmable", and Ethereum (which is definitely programmable) are basically the most correct computers on earth. Due to the consensus that needs to be reached by thousands+ of machines. Even if they're imperfect, ECC-less (for the most part), machines.

Now they may still run code with flaws: but they'll all run it exactly in the same way. If, say, a bit-flip occurs on a machine, that machine won't create a block or won't sign a transaction accepted by others. Not part of the consensus. That is wild.

Then the other thing which boggles my mind and which relates to your comment: the "selling pressure on the market" by Bitcoin miners is, no matter what they do, halved every four years. There were, 8 years ago, still 1800 Bitcoins mined per day. Today it's 450.

And in two years (we're midway before the next halving), it's going to be 225.

And Satoshi Nakamoto planned, from the very start.

Maybe it doesn't make sense (economically or from a security point of view: who's going to secure the network when there's not enough block reward anymore?).

But miners will mine 225 Bitcoins per day, not 450, in two years.

And that is totally fascinating.

Re: Bitcoin miners are losing on every coin produced as difficulty drops

#136

Post by z3c0 » Sat, Apr 11, 2026, 5:47 PM UTC

ziml77 wrote: post #130

luke5441 wrote: post #129

Earlier quoted context omitted.

Depends on if you see the use case of censorship resitant payment as something we should allow or not (such as paying the Ayatollah to go through the strait). I for one don't.

But even of you do see the use, why not proof of stake rather than proof of work?

I'll throw "proof-of-useful-work" into the ring. Reallocating at least a portion of BTCs verification onto existing energy costs could go a long way. Not suggesting it would be easy or that the entire network would be able to agree on what tasks to use, just that it's a theoretical option.

Re: Bitcoin miners are losing on every coin produced as difficulty drops

#137

Post by Tepix » Sat, Apr 11, 2026, 5:48 PM UTC

TacticalCoder wrote: post #135

dmk wrote: post #7

The headline is dramatic but this is literally how bitcoin is designed to work. Miners leave, difficulty drops, costs go down, mining becomes profitable again. The interesting part isn’t the loss per coin, it’s how long the lag between unprofitable mining and difficulty adjustment keeps forced selling pressure on the market.

> The interesting part isn’t the loss per coin, it’s how long the lag between unprofitable mining and difficulty adjustment keeps forced selling pressure on the market. I follow Bitcoin from a theoretical point of view and I find it fascinating. Something that boggles my mind a lot is this: Bitcoin, which is somehow a bit "programmable", and Ethereum (which is definitely programmable) are basically the most correct c…

> I follow Bitcoin from a theoretical point of view and I find it fascinating.

I find it horrible: The damage done to the planet doesn't correlate with the number of transactions. It's maximizing uselessness.

Re: Bitcoin miners are losing on every coin produced as difficulty drops

#138

Post by Tepix » Sat, Apr 11, 2026, 5:54 PM UTC

qweiopqweiop wrote: post #120

Can someone convince me bitcoin mining isn't anything other than a huge waste of energy?

I can't because I think it is. It's also doing its part in destroying the planet as a consequence.

Re: Bitcoin miners are losing on every coin produced as difficulty drops

#139

Post by wslh » Sat, Apr 11, 2026, 5:56 PM UTC

paoliniluis wrote: post #68

It's 2026 and there's still people that believe that proof-of-work makes sense as a consensus mechanism

There is a breakthrough on a more productive Po(useful)W: https://news.ycombinator.com/item?id=47430951

Re: Bitcoin miners are losing on every coin produced as difficulty drops

#140

Post by schmorptron » Sat, Apr 11, 2026, 5:57 PM UTC

dmk wrote: post #7

The headline is dramatic but this is literally how bitcoin is designed to work. Miners leave, difficulty drops, costs go down, mining becomes profitable again. The interesting part isn’t the loss per coin, it’s how long the lag between unprofitable mining and difficulty adjustment keeps forced selling pressure on the market.

In the gap between cost going down and profitability, is there not an increased risk of sybel attacks?