⛏️ Competing to Solve the Puzzle
Understand how miners compete with hash power to earn block rewards
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Introduction
⚔️ Mining Competition
Mining is a zero-sum game. When miners add more hash power, difficulty increases, making everyone work harder for the same reward. Understanding the economics is critical.
🎮 Interactive: Mining Profitability Calculator
Adjust parameters to see if mining is profitable at different scales
100
10 TH/s (Home)1000 TH/s (Farm)
$0.10
$0.03 (Cheap)$0.30 (Expensive)
$40,000
$20K$100K
Daily Revenue
$9.00
Daily Electricity Cost
$7.20
Daily Profit
$1.80
Monthly Profit
$54.00
Break-even hash rate: 888.89 TH/s
Below this hash rate, you lose money at current electricity costs
📊 The Mining Arms Race
📈
Hash Rate Growth
Network hash rate increased 1000x since 2016
2016: 1.5 EH/s → 2020: 120 EH/s → 2024: 400+ EH/s
💻
Hardware Evolution
From CPUs to specialized ASICs
CPU (2009)
1-10 MH/s
GPU (2010)
100-500 MH/s
FPGA (2011)
1-5 GH/s
ASIC (2013+)
100+ TH/s
🌍
Geographic Distribution
Mining moves to cheapest electricity
🇺🇸 United States
38%
🇨🇳 China
21%
🇰🇿 Kazakhstan
14%
🌍 Other
27%
⚠️ The Centralization Problem
As mining becomes more competitive, only large operations with cheap electricity can survive. This creates centralization risks:
🏢 Industrial Scale Required
Home miners can't compete. Mining now requires warehouse-scale operations.
⚡ Energy Dependence
Profitability entirely depends on access to cheap electricity (≈$0.03-0.05/kWh).
🌍 Geographic Concentration
Mining concentrated in regions with cheap energy, reducing network distribution.
💰 Capital Intensive
Latest ASICs cost $5K-15K each. Large farms need millions in upfront capital.