In the early years of crypto currency, bitcoin mining was simply a hobby for many tech geeks. They used their home computers and downloaded specialized software to perfoarm the complex computations and earn a few bitcoins in exchange for the computing power. However, the price of bitcoin increased and transactions grew so that an industry emerged.
Bitcoin mining can be profitable but miners have to source out for cheap electricity. The cost of running machines is estimated at $1,800 and keeping them cool is another economic challenge. About $200 worth of electricity is necessary for cooling power to mine one bitcoin. Operating expenses are also high leaving behind a very small margin of profit after halving happens.
In a small remote region in Iceland, you will find Genesis mining farm that takes advantage of cheap electric transmission costs. Inside the farm’s two large buildings, you will find tens of thousands of mining computers that generate a lot of heat. To save on cooling costs, the buildings are open to allow entry of cold Icelandic air. Particle filters are used to trap dust while fans in the ceiling allow hot air to escape to the environment.
Aside from Genesis there is also a China’s Bitmain that takes advantage of Iceland’s fast internet connectivity, renewable energy supply and cool climate. Iceland has welcomed the bitcoin miners to bring forth a boost to their economy.
Bitcoin miners are facing stiff competition from the Chinese that makes use of hydroelectric energy generated from their unused dams. Others are making use of cheap coal as their source for electricity. It is estimated that more than two-thirds of the computing power or hash power in the bitcoin network is controlled by the Chinese. When the mining reward is halved, bitcoin miners hope that the number of bitcoin transactions have grown sufficiently so that the small fees generated from users will be enough to smoothen out the cut in profit.
Bitcoin Mining Hardware has evolved over the years to solve complex mathematical puzzles and secure a block of transactions that is safe from hacking and manipulations. Security is one of the main attractions of bitcoin mining not to mention that it is a decentralized global network.