When the value of virtual currency jumped in value last year, many turned to the mining industry and bought expensive computer equipment to aid the task.
“If you mine at the moment, you have to be very lucky to get anything,” Mehmet Vatansever told Bloomberg. In February, Vatansever bought $16,000 worth of mining computers to chase after new bit coins.
“It’s a very difficult business,” he said.
The process of mining is entirely digital and is a part of bitcoin’s design. That way the money self-regulates supplies and prevents out-of-control inflation. However, the mining process gets complicated as more bitcoins are created, driving demand for computing power.
But now there are bigger competitors, higher utility bills and declining prices that are making it difficult for miners.
In December, miners were able to make a weekly average of $25.2 million. Within the last week, miners only made $14.9 million in revenue, according to Blockchain.info.
“The mining market has evolved from being mostly isolated ventures to more organized entrepreneurial ventures that are still racing to get an edge with increasingly fast equipment and lower electricity costs,” Gil Luria, an analyst at Wedbush Securities Inc. told Bloomberg. “At this point, the opportunity for individual miners is very small.”
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