Bitcoin has been in the market for over a decade now. When it was first introduced in 2009, people were not so aware of it, but now, with time, people all over the world have started to invest their money in it. Not just that, a huge number of people have also invested a lot of money to buy mining tools and even moved to some “energy-efficient” place to mine Bitcoin.
But that is not it. The Bitcoin network’s hash rate is increasing day by day which is attracting a lot of newer companies to start mining their Bitcoin and earn their share of profits from it. With the increasing level of mining competition in the market, more efficient tools are needed to mine Bitcoin. In the initial days, anybody with a basic CPU could mine it, but that is all in the past now.
A huge number of companies that you would not even expect to have been connected with Cryptocurrencies and mining are now entering the mining business. Straight from health to wellness brands to global shipping companies, Bitcoin mining is gradually making its way into every sphere of the market.
In this article, I will be discussing everything that you need to know about Bitcoin mining, how it works, and also its pros and cons. Furthermore, I will also be discussing the 7 unexpected companies that are trying to explore the world of Bitcoin mining. So, if you are interested in knowing everything about Bitcoin mining, this article is for you.
What is Bitcoin Mining?
Before understanding why a huge number of companies are gradually getting into the Bitcoin mining business, you must understand the basics of Bitcoin mining. Bitcoin mining is the process of creating new Bitcoins by solving various cryptographic mathematical puzzles.
The whole process of Bitcoin mining involves using various mining tools like computer systems and specialized chips that will help in solving mathematical puzzles. The tools must also be connected to a continuous source of energy. And the first person to solve the cryptographic puzzle is rewarded with a block of Bitcoin. The whole process also verifies and authenticates every Bitcoin.
The huge consumption of energy in the whole mining process is also a big issue for countries that solely depend on fossil fuels and other sources of non-renewable energy. In such cases, Bitcoin mining can impact the environment. A huge number of countries have also banned Bitcoin mining due to this reason.
Thus, to earn profits from Bitcoin mining, most of the miners have moved to regions with cheaper sources of renewable energy. Miners all over the world are constantly trying to make the mining environment friendly.
How Does Bitcoin Mining Work?
The miners have to set up modern and efficient mining tools and keep it connected to a constant source of energy to mine Bitcoins. This is the only way to release newer Bitcoins in the market. This also shows that the supply of Bitcoin does not work on a demand-supply chain.
Mining also confirms every transaction on the Bitcoin network. But back in 2009 when Bitcoin was first created, it could be mined by anyone on normal computers with a regular CPU. But back then, the whole mining process was very slow. In recent times, Bitcoin mining requires large mining pools. These pools require a huge amount of constant energy to produce every block on Bitcoin.
It does not matter how much in demand Bitcoin is, the amount of Bitcoin being released in the network will not be affected by that.
But, the amount of money every miner is earning from releasing one Bitcoin is gradually decreasing every four years. When Bitcoin was first mined in 2009, you could earn 50 BTC for every Bitcoin. but in 2020, you could only earn 6.25 BTC for every block.
Seven Companies That Mine Bitcoin
Here is a list of seven companies you never expected to be in the Bitcoin mining business –
Graystone Company – The Florida-based health and wellness company, Graystone announced how they are setting their foot in the Bitcoin mining sector. The company also established its mining tools in September 2021 and has successfully mined 0.1BTC since its launch.
This wellness company which is known to produce great antiaging and longevity products has confirmed that they are using 50 Antminer S19j pro machines to mine Bitcoin. They believe that this will help them gain huge profits in the future.
Sino-Global shipping – Shipping and logistics companies usually do not mine cryptocurrencies. But in February 2021, the Sino-Global shipping company based out of New York announced its wish to get into the Bitcoin mining sector. Now, they are not just a logistic company, but also a Bitcoin mining company.
This helped their core company by raising the prices of the shares by 130%. They now also accept Bitcoin payments for their services.
BlockFi and Celsius – When you think about Bitcoin mining forms, crypto lending firms certainly do not come to your mind. But, BlockFi and Celsius, crypto lending companies in the market are actively working as Bitcoin miners.
BlockFi collaborated with Blockstream’s mining unit to earn profits from Bitcoin mining. They got into the mining business in 2021 and have earned great profits since then. Even Celsius have spent almost $ 50 million in setting up mining tools. The CEO of Celsius also confirmed that they are currently using 22,000 mining machines to stay ahead of the competition.
Horizon Kinetics – There are a lot of banks and other asset management companies that invest their money in cryptocurrencies and crypto mining firms. But, Horizon Kinetics, an asset management company from New York had invested its money to set up its mining firms in 2017.
The company is known to have managed approximately $ 7 billion in assets, and now they are also exploring the Bitcoin mining sector and earning profits from it. The company has also taken up the strategy of buying and setting up thousands of mining tools and negotiating with brands to earn profits from it.
Jasmine Technology – If you think that almost every small technology company is investing their money in Bitcoin mining then you are wrong. Most small technological companies use this as a gimmick to increase the prices of their stocks. Not every small technological company can build a mining industry.
But Thailand based small tech company, Jasmine Technology has announced its entry into the Bitcoin mining sector in 2021. This led to the telecom company’s share process rising by 6,700%. They started mining in December 2021 and they are currently known to operate 325 mining machines and have already mined 8BTC.
E. ON in collaboration with Enerhash – The electric utility companies from all over the world invest their money in the mining sector. The crypto mining sector is evidently becoming more and more powerful day by day and thus, such major companies investing their money in mining can be considered a common thing.
But, E. ON’s Hungarian subsidiary company has collaborated with Enerhash to set up their own mining operation. Most people have not heard about it because mining has considerably increased in America and South America, but this Hungarian company has also set up its own mining operations to earn profits from it.
Pros of Bitcoin Mining
Most people compare Bitcoin mining to gold mining. They believe although Bitcoin mining requires a lot of investment and energy consumption, it is all worth it. Furthermore, the process of mining is quite complex but they also help the miners to gain a huge amount of profit. Here are some of the benefits of mining Bitcoin for you –
No duplication threats – One of the best parts of Bitcoin mining is that your transaction will always be an authentic one due to blockchain technology. This technology saves the miners from all the threats of duplication. This technology makes sure that once you mine a coin, your transaction is recorded in the ledger, and nobody has the power to change it.
A low fee business – If you are looking for a low fee business, then mining is the one you should consider. While making transactions with Bitcoin, you do not need to worry about any transaction fees. But, if you are making transactions with other third-party organizations, you will have to pay transaction fees.
Privacy – Bitcoin miners have a lot of privacy and security. This Crypto promises that the miner’s privacy will not get revealed in any condition. You can have a peaceful life without having to worry about someone invading your privacy and hacking your coins.
Downsides of Bitcoin Mining
There are mostly two cons of Bitcoin mining – first, the financial risk, and second, the government regulation risks.
Just like other investment options, cryptocurrency like Bitcoin is also subjected to the risks in the market. So, you might invest a lot of money and set up your mining equipment to mine coins, but there is a chance that the value of bitcoin would depreciate completely and all your investment might be useless.
Also, the area you are planning to set up your mining tools must be “miner-friendly”. Very often we see the government coming up with various regulations to control the crypto miners. Mining also involves a lot of energy consumption, thus, it is not very environmentally friendly. Furthermore. Mining is also increasing its carbon footprint.
Where is Bitcoin Heading?
The founder of Bitcoin, who goes by the name Satoshi Nakamoto, created the Bitcoin network in a way that every Bitcoin being released in the network will always be verified. Bitcoin is also scarce. There can only be 21 million Bitcoins in the market. And recently, the 19th million Bitcoin was mined. Although 19 million Bitcoins have been mined in a decade, the last Bitcoin will not be mined before 2140.
In 2021, Bitcoin’s price had reached its all-time high as it went over $ 68,000. But this year, the market conditions are not the same. This has shown how volatile cryptocurrency is. Many experts believe that Bitcoin’s value could rise again and touch $ 100,000 in the coming time. But, it is completely dependent on the market.
But if you want to invest in Bitcoin for a long time and not looking for short-term gains, you must invest in it. For Bitcoin investment, you must set your policy as “set and forget”. The prices of Bitcoin will keep on swinging but, Bitcoin is undoubtedly the future.