- Bitcoin’s Proof of Work (PoW) algorithm requires a lot of processing power to solve the complex math equations needed for producing new coins.
- Instead of relying on traditional energy sources for electricity, crypto miners have been drawn to an alternate energy source in the form of solar energy.
- Sustainable energy might just bring some of the smaller players back in the game.
A year-long bear cryptocurrency market and electricity costs have had a negative impact on the profitability of cryptocurrency mining. The ever-increasing competition and higher hash rate – which measures computing power – also make mining Bitcoin unprofitable, especially for small players who cannot afford high-end mining rigs.
Mining is both computationally and energy intensive
It never used to be like this in the early days before cryptocurrencies attracted mainstream attention. Mining was an interest among cryptography geeks, and a single Bitcoin (BTC) was sold for less than a dollar.
As computing power increases, the calculations needed to…