Miners Turn to Artificial Intelligence; Will Bitcoin Mining Become Easier for Ordinary Users?

In the early years of Bitcoin, users could mine this cryptocurrency using home computers and receive rewards for verifying transactions. Now, nearly two decades later, some companies are trying to bring ordinary users back to this market by offering shared mining services and ready-made equipment; however, intense competition and high costs continue to challenge the profitability of this activity.

According to Mihan Blockchain, as some large mining companies shift towards establishing artificial intelligence data centers, the perception has emerged that a reduction in industrial miners' activities could create a new opportunity for small miners. However, the Bitcoin network's hash rate has not changed significantly, and experts warn that mining still requires substantial investment, and recovering the cost of purchasing equipment may take years.

Has Bitcoin Mining Become Easier for Ordinary Users?

Ivo Georgiev, CEO of the cryptocurrency wallet company Ambire, which mined Bitcoin during high school in 2011, says:

Earning from mining is still difficult for ordinary people, and it is not going to get easier.

In recent years, Bitcoin mining has become a specialized industry. Large companies with thousands of devices, dedicated cooling systems, and contracts for cheap electricity have taken control of a significant portion of the network's processing power. Therefore, users who intend to enter this field usually opt for companies that provide access to ready-made equipment and infrastructure instead of setting up a personal mining farm.

On the other hand, the shift of some large mining companies towards artificial intelligence has created hope that reduced competition in the network could make mining more profitable for small users. However, it is still unclear whether the equipment from these companies will actually be removed from the Bitcoin mining cycle or simply transferred to other miners. Mark Zalan, CEO of GoMining, also states that selling equipment to other miners does not necessarily reduce competition for block rewards.

Data from the Hashrate Index also shows that the network's processing power has not seen a significant decrease. The Bitcoin hash rate recently reached about 1.09 zeta hashes per second, while this figure was around 1.13 zeta hashes a year ago and has shown an upward trend over the past two months.

How Much Does Mining Cost and How Long Does It Take to Recoup Investment?

Sazmining has recently begun selling Bitcoin mining boards designed by Block, a company owned by Jack Dorsey. Each board costs $4,187, and buyers must also pay $153 monthly for electricity and maintenance. In addition to these costs, Sazmining takes a 15% management fee from the mined Bitcoin.

The company has received nearly 50 orders for this equipment, about half of which are from individuals who previously had no experience in Bitcoin mining. Sazmining, which has nearly 500 customers and about 4,000 mining devices, predicts that the cost of producing Bitcoin with these boards over their minimum three-year lifespan will be at least 20% lower than buying the same amount of Bitcoin from an exchange! However, the company emphasizes that the return on this investment is not guaranteed.

But the numbers indicate that recouping the initial investment is not that simple. According to Sazmining's estimates, each board mines about 0.035 Bitcoin annually. Assuming a price of $83,000 for each Bitcoin, the value of this amount mined comes to about $2,905 per year. From this amount, $1,836 must be deducted for annual electricity and maintenance costs, along with the 15% management fee. Ultimately, about $633 per year remains to recover the initial cost of the device.

With this in mind, it will take more than six years to recoup the initial $4,187 cost of the device, assuming that the price of Bitcoin, the amount mined, and ongoing costs remain constant throughout this period. The next halving will also reduce the reward for mining each block to 1.5625 Bitcoin, which could extend the time required to recoup the investment.

Mark Zalan, CEO of GoMining, states that regularly receiving Bitcoin from a mining device is different from fully recouping the purchase cost. In other words, just because a device regularly produces Bitcoin does not necessarily mean the investment is profitable.

Jolie Du, COO of KuMining, also points out the impact of electricity costs on mining profitability, stating that an S23 XP Hyd device would take about 23 months to recoup its cost if electricity were free, and about 29 months at a rate of 4 cents per kilowatt-hour. However, this estimate does not yet consider other costs. According to her, daily income from the device alone is not a sufficient metric for assessing mining profitability.

Overall, the shift of large mining companies towards artificial intelligence does not yet mean that easier and more profitable opportunities are available for ordinary users. The network's hash rate remains high, and even if some equipment is removed from the mining cycle, selling it to other miners could prevent a reduction in competition. Furthermore, the costs of purchasing devices, electricity, and the next halving continue to pose serious obstacles for small miners. Therefore, while a return of ordinary users to Bitcoin mining may be possible, it cannot currently be considered a simple or low-cost way to earn profits.

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