Waking up, BTC has fallen back to around 67k.
Recently, things have been tough for Bitcoin miners. They're losing $19,000 for every BTC they mine, and are experiencing a historic mass exodus. This isn't the end of the market, but rather the most brutal yet ingenious self-purification of the PoW mechanism.
According to on-chain data, miners lose an average of $19,000 for every Bitcoin they mine. Production costs are around $88,000, while the price of Bitcoin is hovering below $69,000. This 20% discrepancy is like a sword hanging over their heads, forcing miners to choose: continue holding on and wait for dawn, or shut down their machines and leave in despair?
The Bitcoin network difficulty has dropped by 7.8% in two weeks, the most honest signal yet—some miners are giving up and shutting down or leaving the market. Like soldiers falling en masse on a battlefield, we know the battle has entered its most brutal phase. This scene seems familiar. In 2018, Bitcoin plummeted from $20,000 to just over $3,000, leaving miners penniless, and the difficulty crashed by 15%. In 2021, the collapse of the East China University of Technology (ECUT) halved the hashrate overnight, and the difficulty plunged by 25%. Each time, people cried out that Bitcoin was doomed; each time, Bitcoin survived, and thrived. This time is different. Previously, losses caused by price crashes could be weathered. But this time, with Bitcoin prices still at historically high levels, the problem lies in the cost structure—energy costs have risen, equipment is expensive, and operating costs are high. This means that simply waiting for a price rebound may not save everyone. More importantly, in this crisis, miners have an extra card to play: AI computing power. Names like Hut 8 and Bitfarms are frequently appearing in news about AI computing power leasing. They are shifting their clusters from mining to model training, turning what were originally power-consuming data centers into money-printing machines that output computing power. For the same electricity cost, the revenue from AI computing power leasing could be twice as high as mining. The temptation is too great. Some jokingly say that miners are switching careers to become programmers. But the reality is not so simple. From ASIC miners to GPU clusters, from mining software to PyTorch, from joining mining pools to connecting with cloud service providers, this is a radical transformation. It requires technology, talent, and even more so, patience. But the essence of this path has not deviated from Satoshi Nakamoto's blueprint. As I mentioned in a previous article, the beauty of PoW (Proof-of-Work) lies in its use of massive, constant capital investment to build an almost insurmountable barrier. Every penny miners invest, every kilowatt-hour of electricity consumed, ultimately becomes part of Bitcoin's value. Those who claim Bitcoin is worthless may never understand why an ethereal number can be worth so much money. The answer lies in those roaring mining machines, in those towering cooling towers, in the energy consumed and never to be recovered. This is the core of Satoshi's economics: anchoring the value of the digital world to the costs of the physical world. From this perspective, AI transformation is not betrayal, but evolution. When miners allocate a portion of their computing power from the Bitcoin network to serve the AI market, they are not betraying PoW, but rather giving computing power capital greater flexibility. This may actually make the entire mining community healthier and more resilient to price fluctuations. However, everything comes at a price. As many small and medium-sized miners exit the market, computing power will further concentrate in large mining companies. The combined hashrate of the two largest mining pools, Foundry USA and AntPool, once exceeded 51%. While this doesn't necessarily mean they would actually launch a 51% attack—because that would be tantamount to killing the goose that lays the golden eggs—this concentration itself erodes the ideal of decentralization. What is the essence of decentralization? It's not technology, not code, but the dispersion of power. Satoshi Nakamoto created the PoW miner community to create a system of checks and balances between the two power centers of computing power and capital. If one day, the miner community disappears, or becomes completely subservient to capital, then Bitcoin's robustness will be seriously questionable. Therefore, the current situation is quite interesting. On one hand, PoW is undergoing a brutal purification, eliminating all inefficient players and making the industry healthier. On the other hand, the recentralization of power is putting the ideal of decentralization to the test of reality. The AI transformation, however, acts like a shot in the arm for miners, giving them more leverage to survive in future competition. Looking back now, those miners who sold at the $60,000 mark may be signaling a market bottom. When even those closest to the production end start panic selling, that's often the time to be greedy. Of course, we say "often," not "always." But one thing is certain: this crisis is not the end of Bitcoin, but a necessary step in the industry's maturation. It will weed out the players with the best costs and most flexible strategies, allowing them to thrive in the next cycle. For ordinary observers and participants like us, instead of being swept up in panic, we should read Satoshi Nakamoto's papers, think about the essence of PoW, and understand what Satoshi economics is all about. When you truly understand these things, you won't be easily intimidated by the noise of things going to zero. The bottom of Bitcoin is never a specific number, but rather forged by the beliefs, capital, and sweat of countless people. As long as this bottom remains, Bitcoin will remain. Those who sold at the bottom and panicked will probably never understand why their prices always rise after they sell. So, miners, don't panic. Those who are meant to kneel will kneel sooner or later. Those who are meant to stay will stay.
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