- Increasing Mining Difficulty and Revenue Decline
- Shifting to More Efficient Technologies
- Artificial Intelligence as a Way Out
Bitcoin miners are seeking new opportunities in the field of artificial intelligence (AI) as rising energy costs and mining difficulty make this endeavor increasingly unprofitable.
Increasing Mining Difficulty and Revenue Decline
Revenues for miners have significantly decreased due to several factors. Over the past seven days, Bitcoin prices jumped 12% and the network's hash rate hit an all-time high. However, this has resulted in more miners coming online, making mining even tougher. Investment bank Jefferies reported an 11.8% drop in daily revenue per exahash in August. The main blow came in April with the latest 'halving' event, which reduces the number of new Bitcoins mined by half.
Shifting to More Efficient Technologies
Companies like Marathon Digital and Riot Platforms have faced significant financial difficulties. Marathon Digital’s stock is down by 30% in 2024, while Riot Platforms’ stock has dropped by 53%. Despite a 44% rise in Bitcoin prices this year, it hasn’t saved many companies from losses. However, some industry players, like Marathon CEO Fred Thiel, note that new machines are doubling the hashing power of older models without increasing energy costs. 'No need to add new sites or power,' he stated in an interview with CNBC. Yet, even this does not bring significant profits for companies.
Artificial Intelligence as a Way Out
Some companies, such as Core Scientific, have started leveraging AI and high-performance computing (HPC) capabilities. In September, they struck a $6.7 billion deal with CoreWeave. This deal allows Core to use Nvidia’s powerful GPUs for running AI models. Since emerging from bankruptcy, Core's stock has more than doubled, with a market capitalization close to $3 billion. CEO Adam Sullivan explained that the company's facilities were built not only for Bitcoin mining but for high-performance computing tasks as well. At the time of writing, Bitcoin was worth $59,854.
Increasing energy costs and mining difficulties are forcing miners to seek new survival strategies. The use of artificial intelligence and high-performance computing may become an essential element of their current strategy.
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