You plugged in your computer, which began solving complicated mathematical problems on the bitcoin ledger, and you were rewarded with bitcoin.
Now, 10 years on since the first bitcoin was mined, competition to solve these complicated puzzles on the blockchain has surged making that free money not so free. The company says the rise of institutional mining companies have squeezed retail miners margins.
But the record hash rate hit at the end of August saw miners paying retail electricity prices move to unprofitability for the first time in September. As competition swelled, so did the hash rates, which in turn drove up electricity bills as miners scrambled to ramp up their mining equipment.
However, these costs have reached levels where only institutional companies can foot the lofty electricity bills, Diar research found. But rising electricity prices and mining hardware costs would suggest this average cost has climbed.
Hash rate Furthermore, the plight of miners has been exasperated by the decline in the price of bitcoin.