The moment crypto enthusiasts have been long dreading is finally here: it's now unprofitable to mine Bitcoin.Bitcoin mining is the process where a computer — typically using a power-hungry graphics processing unit (GPU) — updates transactions on the blockchain, validating each with a "proof of work." In turn, these "miners" get the chance to earn a portion of Bitcoin roughly equivalent to the computational power they've contributed to the process.As they mine, each GPU essentially becomes a high-powered calculator, processing hundreds of complex mathematical equations. Bitcoin miners typically hedge the cost of energy used to power their GPUs against the rate of Bitcoin rewarded for validating transactions.Since Bitcoin's inception in 2009, the amount of energy required to mine has always been less than the amount of Bitcoin you got for mining. But that was never going to last; there was a limit of 21 million possible Bitcoins baked into the system from the jump, and the rate of new coins mined has gotten slimmer as competition has increased, making the economics worse and worse over time.These days, one Bitcoin trades for around $94,000, but costs about $137,000 in electricity for small-scale operations to mine, making new coins an economic liability for all but the largest players. For those whales, Gizmodo estimates the most optimal cost for mining a bitcoin at around $82,000 — slim margins which are shrinking fast.As recently as September of 2024, it cost roughly $56,000 to mint a single Bitcoin, meaning that in less than a year we've seen an astronomical increase.In effect, the whole thing is expected to exacerbate the extreme concentration of wealth that Bitcoin enables. Once hailed as the "liberation of currency from central banks," it only took a few years for the whales to turn Bitcoin into yet another financial vehicle for the ultrawealthy.Right now, the top 8 percent of crypto wallets own a little under 99 percent of all Bitcoin in circulation. Zooming in even farther, we see that the top 1 percent of crypto wallets control over 90 percent — so much for all that decentralization that Bitcoin was supposed to represent.In practice, Bitcoin is tightly controlled through a combination of infrastructure — Bitcoin's "proof of work" blockchain system — and a governing community of developers, miners, and other highly-invested stakeholders. This is the "invisible hand" guiding Bitcoin as a speculative vehicle; yet another asset market to game in the hopes of getting rich quick.After more than a decade of libertarian fanfiction, we’ve arrived at the inevitable punchline: Bitcoin is now an unprofitable energy sink that primarily benefits a handful of crypto oligarchs. Maybe the real digital revolution was the friends we alienated along the way.More on Bitcoin: Trump Tells Justice Department to Just Let Crypto Fraud SlideShare This Article