The profitability of solo-mining Bitcoin has faced dramatic shifts since the April 2024 halving, which cut mining rewards in half and increased operational costs for miners globally. Countries that once supported lucrative solo mining are now seeing reduced profitability, especially as energy prices rise and mining rewards diminish.
A recent report by NFT Evening highlights the sharp contrast in mining costs between different nations. In high-cost energy nations like Ireland, it costs around $321,112 to mine just one Bitcoin, while countries with lower energy costs, such as Iran, can mine the same Bitcoin for about $1,324. The U.S., despite being one of the largest Bitcoin mining hubs, also faces challenges. Many U.S.-based miners reported operating at a 50% loss when Bitcoin prices dipped to $57,909 in September 2024.
Bitcoin operates on a proof-of-work consensus model, requiring miners to use computational power to solve complex problems and earn block rewards. The halving event, which occurs every four years, reduces these rewards, tightening the supply of new Bitcoin and making it more challenging for miners to profit without access to low-cost energy.
Global Mining Profitability Post-Halving: The halving had a notable impact on profitability in certain countries, especially in regions where Bitcoin mining is banned. Ironically, in places like China—where mining is illegal—miners could technically benefit from lower energy costs. Several African nations such as Ethiopia, Sudan, and Libya, which offer low energy tariffs, have become attractive to institutional miners. Meanwhile, in Europe, soaring electricity prices have significantly raised the entry barrier for solo miners. Countries like Germany and the U.K. face mining costs that can be five times the market value of Bitcoin.
Institutional Mining and the Future: Even large-scale institutional miners have not been immune to the changing landscape. Stronghold, a prominent Bitcoin mining firm, announced plans to sell its operations just weeks after the halving, as the company struggled to maintain profitability under the new conditions. In response, competitors like Bitfarms have explored acquisition opportunities to consolidate mining capacity and survive the reduced block rewards.
As the network continues to evolve and adapt to these challenges, miners globally will need to innovate or relocate to low-cost energy nations to remain profitable. The halving not only introduces scarcity into Bitcoin's supply but also reshapes the economic landscape for the mining industry worldwide.
