Bitcoin. Without the mining process, it’s most likely that Bitcoin wouldn’t be here today since it’s an essential part of the PoW consensus mechanism that powers the entire ecosystem.
However, as Bitcoin gained more popularity, mining became more complicated since miners had to sustain the increasing number of users on the blockchain. This led to the need for strong computational power, specific processing units and integrated technologies. Unfortunately, things got so challenging that if you buy Bitcoin with debit card, the entire transaction consumes up to 1,200 kWh, the equivalent of around 100,000 VISA transactions.
Bitcoin mining is now contributing to climate change, as energy isn’t efficiently leveraged and requires considerable financial resources to provide modest income. At the same time, the difficulty level interferes with people’s willingness to start mining, which, in the long run, may affect the blockchain’s safety.
But one of the latest mining projects is ready to mitigate issues and make Bitcoin mining affordable and easier for novices.
Ensuring more control to Bitcoin miners
Up until a few years ago, anyone who started to mine seriously and had some spare finances could make decent money off of it. But as Bitcoin halving continued occurring every four years since its deployment, Bitcoin supply and demand changed considerably during these time frames. With fewer bitcoins issued, the rate of new coins entering the market would also decrease, making it less profitable for investors, and the circle of events would repeat.
However, some digital companies want to change that and help miners have more control over their activities. One of them, GoMining, offers new users to mine without needing expensive hardware equipment by ensuring their access to mining data centers. The company has massive locations around the world with impressive capacity that supports an increasing number of miners who receive rewards for their contribution.
Avoiding risks of centralization
Although the crypto industry presented itself as the main path to decentralization, there are still risks to getting centralized, at least in some of its sectors. That’s because, despite constant efforts, few mining groups control a significant amount of the blockchain’s hash rate. This happened due to growing mining pools since they were the primary way for miners to invest little and have the chance to win money. It was worth entering mining pools because they allow splitting rewards with other members, but also processing power since their contribution led to a block’s reward.
Now, regardless of how much a miner invests in his rigs, they can’t compete with a mining pool whose experience is of a few years. However, centralization issues can be tackled by introducing tokenomics, through which users can own hash rates more transparently and safely. Owning special tokens allows miners to be rewarded while paying for the electricity used.
What should Bitcoin miners expect from the next halving?
A Bitcoin halving isn’t new, but it went unnoticed until now because it hasn’t affected miners this much. The process was created to minimize miner’s rewards in half and increase demand in theory. However, things are different as the halving unfolds, especially now, when Bitcoin has gone through so many crypto winters and computational power is more expensive than ever.
Therefore, for the 2024 BTC halving, miners must prepare to face challenges. First, they need to update their mining rigs so they can leverage better resources despite the rewards’ minimizing. They are also required to look for sustainable and affordable renewable energy solutions since the cost of regular energy increased significantly, and using the same amount won’t be enough next year. Some miners already use sustainable resources like hydropower, wind and solar power.
Considering the last halving in 2020, miners should also be prepared financially to cover losing revenues because it might take some time for Bitcoin’s price to show growth. Last time, only after five months after the halving, Bitcoin was back on track. Therefore, cash reverses might be a good solution to face scarcity.
Finally, miners can diversify their revenue streams by using colocation services. These companies offer miners the possibility of accessing the mining resources of a powerful business and paying for the rack space and any other third-party services. This helps miners by reducing their costs and improving security measures.
How profitable is Bitcoin mining since the last coin to be mined is close to happening?
While novice miners might enter this industry to leverage sustainable income revenue, it’s hard to say how the crypto market will change in another 20 years. It’s predicted that the last Bitcoin will be mined around 2140, which is pretty far from now. This might vary depending on
Bitcoin’s performance in the future because each halving will shake its value and security.
It’s expected that miners will only receive rewards from transaction fees when the last bitcoin is mined since there will be no more blocks to mine. However, this is not entirely sure to happen, and the final coin might be closer to being mined than predicted.
That’s because the maximum supply is only 21 million coins, and we’ve already reached more than 19 million with only three halving moments happening. A few factors might speed up the process even if rewards get halved due to the rise in Bitcoin consumers and even Bitcoin adoption by governments.
At the same time, considering how much miners have struggled recently with keeping up with supply, demand, media image and new technologies, this date might also be postponed due to the incapacity to enter the market. But we’ll see how things unfold.
Bitcoin mining became considerably difficult since hardware is much more expensive due to the high demand and sustainability issues. The next halving also contributes to miners’ challenges to mine, which leaves newcomers with no hope to enter, not even mining pools. Still, digital companies are looking for ways to make mining more accessible for everyone to have fairly equal opportunities and financial outcomes.