Foundry and Antpool have dominated Bitcoin mining by mining 54% of all Bitcoin blocks in the past year. This dominance comes as the competitive landscape for mining has eroded profitability. The price of Bitcoin is currently trading close to an all-time high, but this doesn’t necessarily translate to higher profits for miners due to the record-high network hashrate.
Hashrate refers to the computational power used to mine transactions on proof-of-work blockchain networks like Bitcoin. Bitcoin’s hashrate is currently around 635 exahashes per second (EH/s) while the price sits at $64,500. This is a significant increase from November 2021 when the hashrate was just 161 EH/s.
As a result of the increased competition and higher mining costs, mining profitability for SHA256 blockchains is nearing a six-year low. Some of the largest U.S.-based Bitcoin miners remain profitable due to being publicly traded, with their stock value factored into total profitability.
The increased hashrate and competitive environment have led to greater network security, but there is concern about the centralization of mining operations. Foundry and Antpool mining over half of all Bitcoin blocks raises questions about the integrity of the network.
With the need to replace mining units and declining block rewards, more miners may choose to stop operating rather than continue at a loss. This trend highlights the challenges facing Bitcoin miners in the current competitive landscape.