The Institute of Electrical and Electronics Engineering (IEEE) has released a study called “Minting Money With Megawatts,” revealing the fierce competition in the bitcoin mining industry, which is expanding the cryptocurrency network significantly.
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The Bitcoin Mining Economy Is Fiercely Competitive
The report, written by Sveinn Vakfells of Flux Ltd., and Jon Helgi Egilsson from the University of Iceland, details the massive growth of the bitcoin mining enterprise. According to the researchers, miners are consuming 169 MW of power, while pulling in an annual revenue of $545 million.
Bitcoin’s financial network depends on computational mining processes, with revenues being diluted as the system’s processing capacity continues to grow. As growth progresses, miners’ profits subsequently drop, leading to crucial decisions of balancing financial incentives, electric and hardware costs, and the overall performance of mining hardware.
This has led to the author’s belief that incumbent miners will continue to consolidate, while new miners will be pushed out of the industry.
The IEEE report explains:
Capital costs of the latest systems and facilities are high which presents a barrier to entry to new miners. Consolidation in mining raises concerns about the integrity