Bitcoin Mining for Retailers Unprofitable, Bitmain Shifts Focus to Manufacturing Business

The famed Bitcoin mining industry boasted of record revenues in the first half of 2018, surpassing all of 2017.

Research from Diar shows the network's increased hashing rate meant mining firms paying retail electricity prices faced a net loss for the first time in September 2018.Big on Paper, Not on Fiat.

For small mining businesses and corporations paying retail electricity prices, the increase in computing power for maintaining the Bitcoin network meant overall losses.

Much of China's mining landscape benefits from its $0.04 kW/h wholesale price, with the amount approximately double for retail customers.

Despite its reluctance towards cryptocurrency businesses, China remains one of the best economies in the world to set up a mining farm in, even on a retail scale.

Such expenses have made Bitcoin miners a feature of billion-dollar enterprises who can stomach periodic losses and invest into building mining farms across the world.

The company owns two of the world's largest mining pools, AntPool and BTC.com, which together command 42 percent of Bitcoin's hash power.

About 95 percent of Bitmain's revenues in 2018 came from the sale of mining rigs.

Keeping Bitmain's dominance on the Bitcoin network in mind, the company must keep mining profitable for retailers-controlling its hashing power at all times and shifting operations between its Chinese and U.S. units to ensure profitability.

The company runs 11 mining units in China, accounting for 6 percent of Bitcoin's hashing power, and has three farms coming up in the U.S. at the start of 2019.