Within a week, it is possible to observe the dominance of the five largest Bitcoin mining pools, receiving 87.81% of all block rewards, dominating the profitability of the business and attracting more miners (or hash power) to their cooperatives.

The two largest pools — Foundry USA and AntPool — discovered 56.9% of Bitcoin blocks in the last seven days. This dominance has been increasing, along with the mining difficulty — since in longer time frames, their shares did not exceed 30% and 20%.

This further increases the difficulty of mining in Brazil, as there are financial barriers to importing equipment into the country, according to Denny Torres. [see attachment]

About this, Alex Ferreira explains that today it is already possible to rent the machines with their producers, being able to pay up to about 1% per month, depending on the lease contract.

Which enables the expansion of already well-established businesses that manage to negotiate these terms.

In this way, the more difficult it is to mine Bitcoin, the more exclusive the activity becomes. Limited to corporations with greater purchasing power and maintenance capacity.

*Bitcoin mining revenue, costs, and profits*

According to MacroMicro’s data, at the time of writing, the average cost to produce a single bitcoin (1 BTC) is estimated to be around $30,693. The average is obtained by the University of Cambridge, by crossing data and global costs involved in the activity.

Mining through the proof-of-work (PoW) system was the method picked to secure the Bitcoin network and distribute new coin units to participants who dedicate work and resources to the activity. [see attachment]

This may discourage smaller miners like Denny Torres from directing their machines to the Bitcoin network and seek greater profitability on other networks.

This fact favours large mining farms, while concentrating hash power in a smaller group of larger miners.

*The importance of Bitcoin mining difficulty*

The penultimate increase in mining difficulty occurred on May 31, up 3.4%, surpassing 50 trillion hashes for the first time in blockchain history. And, before that, an increase of 3.22% on May 18th.

In block 794304, confirmed on the Bitcoin network on Wednesday (14), the difficulty observed was 52.35 trillion, breaking new records.

“The greater the difficulty, the smaller the reward. Consequently, less profitability.”
— Juliano Ferreira (Caju)

These purchases are made indirectly — by paying for the necessary equipment, energy consumption, and other costs involved in the activity, to get more BTC in his personal wallet.

Torres also has a YouTube channel on the topic with over 191,000 subscribers; and says that he uses a GPU structure, instead of specialized equipment (ASIC) for Bitcoin.

“A miner that uses GPU or CPU is like an Uber driver…”

*This report was originally posted in Portuguese-BR at Portal do Bitcoin (written by @vinibarbosa)

https://portaldobitcoin.uol.com.br/pequenos-mineradores-de-bitcoin-no-brasil-estao-sendo-sufocados-nao-e-rentavel/

Data from Cambridge University and the MacroMicroMe website show that, on average, costs of mining 1 BTC have been above its dollar value for ten months. Going back to August 2022, there were only a few one-off daily reliefs in the period.

Have the average Bitcoin miner been operating their businesses at a loss for nearly a year?