Despite the development of alternative consensus algorithms and regular discussions about the 'inefficiency of mining' as a phenomenon, this area of activity maintains the status of a real industry, attracting new participants.
Technically, BTC mining is the process of extracting (issuing) new coins by creating new blocks in the Bitcoin blockchain and adding new transactions to it. In Bitcoin, miners calculate the hash of the block header using the SHA-256 algorithm, utilizing their computational power. In other words, the essence of mining from an economic point of view is that participants must incur real costs: buy expensive equipment, ASICs, spend money on maintenance and hosting, on electricity, and so on. This distinguishes the Proof-of-Work (PoW) consensus algorithm from, for example, the Proof-of-Stake (PoS) used by Ethereum.
The significance of mining has been repeatedly emphasized by the creator of the PoW mechanism, cypherpunk, co-founder, and CEO of Blockstream Adam Back. He stated that PoS contains 'fundamental problems' and reproduces 'the worst traits of fiat (government) money' - unlike PoW.
PoS developers are aware of the economic issues, particularly the 'Nothing at Stake' problem, and even implement solutions similar to slashing (economic sanctions). Nevertheless, Bitcoin with its mining remains the largest cryptocurrency by market capitalization. The total hash rate sets new records year after year. In September 2025, it set an absolute record, exceeding 1.3 ZH/s (zettahash). On the other hand, in January 2026, the total hash rate level decreased almost by half, to 725 EH/s. But why has the hash rate varied so much in recent months, and what factors influence this?
What miners are currently getting.
In April 2024, at a height of 840,000 blocks, the fourth halving of Bitcoin occurred, as a result of which the block reward decreased from 6.25 to 3.125 BTC. These 3.125 bitcoins became a fixed part of miner income (excluding fees) until about April 2028. Considering that on average, a new block is generated once every 10 minutes, about 144 blocks appear in the network daily, which means about 450 new BTC per day.
Although 450 bitcoins is a huge economic incentive, one should not underestimate the commission fees. They play a significant role in the activity of miners. For example, against the backdrop of the halving in spring 2024, abnormally high fees were recorded in the network, reaching $128 per transaction - against the backdrop of the launch of the Runes protocol. On April 20, the day Runes was launched, more than 70% of all transactions in the entire blockchain were related to this protocol, overloading the mempool. In a short period, the total transaction costs for users, and therefore the commission fees for miners, exceeded the block reward itself.
The total hash rate of Bitcoin is extremely dynamic also because miner incomes are unstable. Interestingly, at the beginning of 2026, the situation with commissions is developing in the opposite direction - against the backdrop of a decline in the BTC exchange rate, transaction costs decreased, with the average size being around $0.5.
At the same time, as of the end of January, it is not uncommon for the total commission fees for one block to be less than 0.025 BTC, meaning the total reward for the miner in such a case does not exceed 3.15 BTC.
Additionally, when comparing the price of Bitcoin in January 2026 with the historical maximum of October 2025 (over $126,000), the price lost more than 30% during this period.
In short, the decline in the total hash rate in early 2026 was caused by at least two factors: the decline in the main cryptocurrency's price and low commission fees in the network. Against this backdrop, miners often prefer to turn off their equipment or redirect their power to something else (for example, to meet the needs of neural networks).
Naturally, this affects the change in the network difficulty indicator, which currently corresponds approximately to the level of September 2025. Since October, in six out of eight recalculations, the difficulty has decreased, including two consecutive decreases since the beginning of this year, 2026.
The main total hash rate of the Bitcoin network is accounted for by the largest mining pools. At the beginning of the year, Foundry USA leads among them (23.35%), followed by AntPool (21.26%), and closing the top three is ViaBTC (11.08%).
Electricity and mining equipment.
As for the equipment, in early 2026, one of the most popular models on the ASIC market remains the Bitmain Antminer S21 and its variations. This year, the industry is expected to be replenished with new products - starting in March, the flagship device from Bitmain S23 Hyd, which operates on liquid cooling (580 TH/s at a consumption of 5510 W), is expected to be shipped.
Among competitors, the Avalon Miner A16XP-300T model (300 TH/s at a consumption of 3850 W) from Canaan should be mentioned. Although it was introduced back in the fall of 2025 (and the first shipments began then), it is currently listed on the manufacturer's official website as being scheduled for delivery in the second quarter of 2026. It is worth noting: by specifications, the model is not as efficient as the flagship solution from Bitmain. On the other hand, if one examines the shipping prices on official websites, it will be found that the device from Canaan will cost more than twice as low.
The final cost of equipment in the market can differ significantly from the prices set by the manufacturer. At the same time, the practice of buying used equipment remains popular. Sometimes this allows one to acquire an ASIC at a price significantly lower than that of a similar new device.
Naturally, any equipment, whether new or used, requires electricity, the cost of which must also be taken into account. If we look at global statistics, prices between conditional Paraguay and Ireland will differ by more than tenfold (in favor of Paraguay).
The cost of electricity can also vary depending on the region of a specific country. For example, despite relatively high prices in the USA, in Texas, the cost of electricity for industry is lower, allowing companies like Marathon Digital (MARA) to place their computing power there.
The issues of calculating the cost of BTC mining.
It is unfortunately impossible to definitively assess all costs with a fixed universal sum that is fair worldwide. At best, one can attempt to consider the factors influencing the formation of the cost of mining one bitcoin and estimate expenses with considerable error. In summary, here is what the cost of mining currently depends on:
The network difficulty level. The higher the difficulty, the greater costs a miner must bear (having more computational power) to increase their chances of receiving a block reward. Although the difficulty is currently decreasing, the decline in the total hash rate in January indicates that for many, mining BTC is not as economically attractive.
