Diar report: as Bitcoin mining revenues reach ~$5B in 2018, rising costs like electricity are making mining unprofitable for all but the biggest of players
Bitcoin (BTC) miner revenues for the first six months of 2018 have already surpassed results in 2017, but the miners themselves see little profit …
Context & Ripple Effects
Back in January, mining looked like a license to print money — Bloomberg reported Chinese miners stayed profitable as long as bitcoin held above $6,925 (that early-2018 profitability window). Ten months later, Diar's tally shows the flip side of scale: roughly $5B in first-half revenue, yet rising electricity and operating costs leave the margin almost entirely to the biggest operators.
The story matters because it marks the moment mining stops being a hobbyist business and becomes an industrial one — a pattern the coverage keeps confirming, from the 2020 halving prep spending to TheMinerMag's finding that median mining costs keep climbing quarter over quarter.
First-order effects
- Small and mid-sized miners face shutdown or forced exit as electricity costs eat their thin margins, while large operators with cheap power and scale capture a growing share of the ~$5B revenue pool.
- Diar's numbers turn mining profitability into a public benchmark, pressuring publicly traded and venture-backed mining firms whose unit economics now look worse than their headline revenues suggest.
Second-order effects
- Unprofitable miners dumping equipment depresses the secondary market for rigs — the same dynamic behind efficient machines selling at ~$24 per 100 terahashes in late 2022 after the post-2021 hardware fire sales.
- Mining migrates toward the cheapest power sources, concentrating demand in a few regions and pushing electricity prices up for local residents near large mine clusters, as later reporting on 34 US mines showed.
Third-order effects
- If the cost curve keeps outrunning revenue per hash, mining consolidates structurally around industrial players — a trajectory visible in TheMinerMag's projection that median mining costs would hit $70K by Q2 2025, up from $52K in Q4 2024 (the continuing cost squeeze) — leaving scale and energy access as the only durable moats.
- Concentrated, energy-hungry mining invites regulatory scrutiny and pushes surviving miners to reposition their sites as general compute infrastructure rather than pure bitcoin production.
The trend: Bitcoin mining is consolidating from a distributed, hobby-accessible activity into an industrial business where only operators with the cheapest power survive each cycle of rising costs and reward cuts.