Cryptocurrency mining industry is getting ahead in the race of crypto mining. As the mining industry broadens, cryptocurrency mining is becoming harder for small-scale miners. Small-scale miners who use their personal computers for mining are facing a real threat from large-scale businesses.
Cryptocurrency mining industry is composed of big businesses who run giant farms of mining. They design and manufacture their own chips and other equipment for mining, for the most cases. As the industry grows, some businesses are becoming larger and larger. Thus, they turn into crypto tycoons. Small-scale businesses which are mostly run by individuals using their own computers are facing a real threat by the larger players. Since the individuals buy the equipment from manufacturers, they have disadvantages compared to industry-scale mining. On the other hand, large-scale miners can buy equipment in bulk and pay for electricity at a reduced rate. Even some industry-scale miners are having difficulties competing others because of their limited capacity.
The fact that all miners control 20 or 30 percent of the coins can induce the industry to be controlled by few players. In other words, as the miners’ coins get consolidated, the industry would be pushed towards being controlled by a group of large-scale miners. Therefore, this can lead to deterioration of the ecosystem. Because the small-scale miners would not be competitive with the big players, that would harm them so much. Also, this may mean the decentralization of the ecosystem is compromised.
Finally, small-scale players are facing computer component shortages since 2017. This demand was not met by the manufacturers. Eventually, the prices of graphics cards went up. Such fluctuations in the prices of components also harm the small-scale miners. This lead some players to go out of the market empty-handed.
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