The Latest in Bitcoin Mining: State and trends

Bitcoin miners Current state and trends
Bitcoin miners Current state and trends

Bitcoin mining is an important part of the cryptocurrency ecosystem. Without mining, new cryptocurrencies won’t be released in the market, and the transactions wouldn’t be processed. While now new-age cryptocurrencies such as Binance Coin, Solana, etc., operate on a Proof of Stake consensus algorithm, which does not require mining, the first invented cryptocurrency still operates on a Proof of Work consensus algorithm that depends heavily on mining. 

Due to the ongoing bear market, the crypto mining industry took a hit. But, new reports suggest that the coming weeks will provide relief to the miners. However, before understanding the current state of crypto mining, let’s first understand Bitcoin mining. 

What is Bitcoin mining?

Bitcoin mining is the process of solving complex computations to record transactions and create new blocks on a blockchain network. As a result, the miner who solves the computations using ASIC miners receives BTC as a reward. With time the process of cryptocurrency mining has evolved as the complexity of the computations increased along with the number of transactions. 

The profitability of Bitcoin mining depends on several factors such as the availability of the mining hardware, the hash rate, the complexity of the mining pools, energy costs, market conditions (the price of the token mined), etc. 

Let’s now take a look at the current state of miners. 

Current state of Bitcoin miners 

According to this report, the rewards for solving one hash have decreased from $2.28 per hash in 2017 to $0.22 in April 2022. While it is clear that the mining profit in USD has decreased over the years, the mining industry is still going strong.

According to research conducted in 2021 about blockchain analysis of the Bitcoin market, 10% of miners control 90% of the mining capacity, making the industry highly concentrated. However, with the advancement in technology, ASIC miners are becoming more efficient, thus giving small-scale miners more opportunities to make a profit in this industry. 

Moreover, due to the current market conditions, the sale of mining hardware decreased rapidly, causing a price drop that created a profitable opportunity for new miners to join the industry. Moreover, last year China banned Bitcoin mining in the country (again), which forced the miners to shift their operations overseas. However, this came as a blessing to the miners as they are now operating in countries with cheaper renewable sources of energy, cutting down on operational costs. 

Capitulation is expected to be done by September

The present edition of market research conducted by the cryptocurrency mining firm Blockware suggests that there are changes in the mining ecosystem suitable for switching up the trend in place in the industry since early June. 

According to the hash ribbons metric, miners have been retiring for a longer period of time, and as of August 1st, the hash ribbons are signaling capitulation for 55 days. According to the report: 

“The current miner capitulation began June 7th, 2022, and it has lasted a significant amount of time. It’s important to note that miner capitulations are particularly relevant because it reveals that a large number of machines are no longer hashing.”

“Since June 7th, other new generation mining rigs have likely been plugged in by both public and private mining companies. However, enough old generation machines or inefficient overleveraged miners have shut off, that hash rate and difficulty have actually decreased in size.”

This upheaval reflects the mining profitability letdown caused by the price downturn of BTC. In June, the price reached as low as $17,600, causing the market to go back two years back. However, as the market starts to slowly recover, all the signs point to the fact the price strength is returning, giving hope to the miners for better conditions. According to Blockware, capitulation defined by hash ribbons should be over by the summer. 

“If there are no new lows in Bitcoin, we should expect the miner capitulation to end in August or September at the latest,” the firm added.

Don’t forget, there are numerous reasons why Bitcoin is valuable, and most of its important features are not directly correlated with the current price. If you want to learn why this is the case, refer to this article.


The early signals visible on-chain due to automated adjustments in network fundamentals of Bitcoin point toward the return of miners. As the industry recovers and more countries accept BTC legally, the popularity of the cryptocurrency will continue to increase, which in turn, will increase the price of the token. Moreover, as the price of Bitcoin increases, the rewards will be increased as well, making its mining more profitable.