The background of the mining industry's increased difficulty in monetization

Profiting from cryptocurrency mining has become more difficult than ever before. The rapid increase in mining difficulty due to network expansion, soaring energy prices worldwide, and market dominance by large operators are creating a situation that pressures individual and small-scale miners.

The Impact of Rapidly Increasing Mining Difficulty

As more miners join blockchain networks, the system automatically raises the mining difficulty. This adjustment mechanism ensures that, regardless of how much the overall network hash power increases, block generation times remain constant.

In the case of Bitcoin, difficulty is recalculated approximately every two weeks (every 2016 blocks), maintaining an average block time of about 10 minutes. Each time difficulty rises, higher computational power and associated electricity consumption are required, leading to escalating operational costs with no apparent limit.

Structural Problems of Unprofitable Mining

Rising Energy Costs

The largest variable cost in mining operations is energy consumption. As energy prices rise worldwide, the situation has changed even in regions that were once low-cost hubs for miners.

Kazakhstan was previously a country that provided inexpensive electricity to many major mining companies. However, in 2023, a new electricity pricing system was introduced, significantly impacting miners’ profitability. Similarly, regulatory authorities in various countries are increasingly imposing taxes and operational restrictions on mining activities.

The Elimination of Small-Scale Miners Due to Scale

The rise of large mining farms further diminishes the competitiveness of individual and small miners. Large operators benefit from economies of scale in hardware procurement and access to cheap power sources, achieving efficiencies that small entrants cannot match.

Moreover, advances in specialized mining equipment such as ASICs (Application-Specific Integrated Circuits) have rapidly increased the technical and capital barriers to entry for new players.

Geopolitical Reorganization of the Mining Industry

China’s crackdown on crypto activities in 2021 significantly reshaped the global mining map. Miners fleeing China migrated to crypto-friendly countries such as the US and Canada, leading to a surge in mining activities in these regions.

However, regulatory scrutiny is also intensifying in emerging mining countries, becoming a critical factor that could influence future profitability.

Technological Innovation and Shift Toward Renewable Energy

As of 2025, the mining industry is undergoing rapid transformation. Major companies aiming to maintain profitability, such as Bitmain, are pushing large-scale investments into solar and wind energy.

This shift is both a countermeasure against rising traditional energy costs and a response to environmental criticisms. The industry as a whole recognizes that structural improvements in energy costs are essential for long-term profitability.

Data Showing Declining Mining Efficiency

According to a study by Cambridge University, the global hash rate (the total computational power engaged in mining) has been increasing exponentially since 2018, nearly doubling each year.

Meanwhile, average profitability per miner is moving in the opposite direction. In early 2021, the average daily revenue per TH/s (terahash per second) was about $0.30, but by mid-2025, it had fallen to approximately $0.10, shrinking to less than one-third in just a few years. This figure vividly illustrates the rapid deterioration of mining profitability.

Future Directions for Mining Business

When considering entry into mining, it is essential to understand not just investment decisions but also the fundamental changes in market structure. Focusing on emerging cryptocurrencies with relatively less competition than mainstream currencies is strategically important.

At the same time, utilizing renewable energy and adopting the latest mining equipment can slightly improve profitability. Ultimately, the pace of technological advancement, regulatory environment fluctuations, and overall market dynamics will be decisive factors influencing the profitability of mining operations.