Nothing ever stands still in the world of Bitcoin mining. July brought its batch of fresh challenges upon miners. First, the Bitcoin price went sideways, cutting into mining profits. But even as it became truly difficult to make money, more companies joined the mining race.
Large mining companies operating in the US outperformed their smaller peers. It is reported that they mined more Bitcoin compared to previous months. Only this goes to prove that owning a large bank of powerful computers comes in handy in the mining world. But it also means that small miners might have a harder time keeping up.
The total Bitcoin miners' power, called the hash rate, has remained about at a similar level in July. So when more miners joined the party, not much more new power was added to the network. It is just like when more people fish from the same pond but catch the same amount of fish.
August might even be tougher for miners.
The Bitcoin price has fallen even further, and now the hash rate is increasing. That basically means miners will have to put in much more effort for a lesser reward, a game whose rulebook kept changing for the worse.
Some big banks are watching the mining world closely. They think it is important to see how US companies perform against miners in other countries. It seems US miners are doing rather well at this moment, but in the world of crypto, things can change quickly.
Why it's important for people thinking about getting into Bitcoin mining to understand these trends?
it's not just about having strong computers anymore.
Miners need to think about electricity costs, the price of Bitcoin, and how many other miners are out there. That's a complex puzzle AND it changes all of the time.