Earlier quoted context omitted.
Or use it for other coins.
They all correlate with bitcoin. Same problem probably applies.
No. all coins do not have equal mining participation.
Bitcoin miners are losing on every coin produced as difficulty drops
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Re: Bitcoin miners are losing on every coin produced as difficulty drops
#102Earlier quoted context omitted.
I'm far from a crypto expert but aren't costs largely GPUs and electricity here? Those are now being driven by massive AI demand and are likely to remain so for the forseeable future. So how would costs go down?
Bitcoin is no longer mined by GPUs but by ASICs
Don't the ASICs compete with the same fab capacity that fabs GPUs, RAM, SSDs etc.
Re: Bitcoin miners are losing on every coin produced as difficulty drops
#103Earlier quoted context omitted.
I'm far from a crypto expert but aren't costs largely GPUs and electricity here? Those are now being driven by massive AI demand and are likely to remain so for the forseeable future. So how would costs go down?
I don't think GPUs are competitive at all. You need specialized mining rigs with bitcoin mining specialized chips.
And that since a solid decade.
Re: Bitcoin miners are losing on every coin produced as difficulty drops
#104Earlier quoted context omitted.
What? That's not true. You don't need more than one CPU miner online for tx to go through. That's why there are difficulty adjustments.
But as number of miners drop arent btc at risk of a 50% attack?
But if you have anywhere near the market power to do a 50% attack, you can make a lot of money mining.
Re: Bitcoin miners are losing on every coin produced as difficulty drops
#105The 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.
If "difficulty drops, costs go down" so ought the price? Isn't that basic economics? Or are they chasing the "phase difference", lag, between supply demand?
It's the reverse.
As price per coin goes up, more folks will find mining profitable and invest in mining operations. Difficulty goes up until it's no longer attractive for anyone to add to the global hash rate.
As price per coin goes down, less of those operations are profitable and fewer new people will find it to be a good investment. Difficulty stays the same or goes down. Due to capital expenses, difficulty is more sticky in the downward direction than upwards.
There is of course some marginal price action in between where there is in theory selling pressure from miners when it's less profitable to mine (to fund operational expenses and debt), but I don't think it's super material to the overall market volume these days.
Re: Bitcoin miners are losing on every coin produced as difficulty drops
#106Isn't AI the new hot thing, why are the miners still going after Bitcoin, when they can probably just use the same infra for AI and make more money, stay profitable.
the market is made up of many goods and services. Different people want different things at different times.
Re: Bitcoin miners are losing on every coin produced as difficulty drops
#107Maybe a basic question - do miners use solar? Prices are dropping so fast it seems like the cheapest way to power mining rigs. Also free grid electricity for three hours a day in Australia will be interesting.
They generally use whatever is available and cheapest. However, due to the constant power demand and the capital cost involved (you don't want your miners sitting idle), if that isn't grid power, its often either "reliable" renewables (e.g. hydro), "stranded" fossil energy (e.g. gas that would otherwise be flared off), or in the worst case, literally buying a coal power plant that was about to shut down just to power a Bitcoin mine.
Re: Bitcoin miners are losing on every coin produced as difficulty drops
#108Earlier quoted context omitted.
you didn't answer the question. A shovel in this case is the equipment + energy needed to mine (GPU's etc.)
Which is pretty much obvious to anyone who has heard of bitcoin in the year of our lord 2026 Especially since the "sell shovels during a gold rush" has been used to apply to nVidia
But the person upstream hasn’t. It’s not obvious to them. Which is why a good answer has to include the detail.
Re: Bitcoin miners are losing on every coin produced as difficulty drops
#109The 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.
A perpetual boom bust cycle? Sounds healthy.
This is exactly how real world economy is (ideally) meant to work.