The cryptocurrency mining landscape is entering a new era defined by intensifying competition, rising operational costs, and shrinking margins. According to Alan Li, CEO of Jsbit, speaking at the “Big Dog Night – Hong Kong” global sales summit on June 27, the future of mining will become increasingly “neijuan” — a Chinese term describing fierce internal competition within an industry where gains are diminishing and efficiency is paramount.
This shift is being driven by two critical factors: energy scarcity and escalating semiconductor costs. As the crypto ecosystem matures, miners can no longer rely on cheap power and readily available hardware to maintain profitability. Instead, long-term success will depend on strategic planning, access to sustainable energy, and optimized infrastructure.
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The Growing Pressure of Energy Constraints
Energy has always been the lifeblood of cryptocurrency mining. However, as global demand for electricity rises and environmental regulations tighten, access to low-cost, stable power is becoming a major bottleneck.
Alan Li emphasized that energy resources are no longer abundant or easily accessible for large-scale mining operations. Regions that once welcomed mining farms for economic development are now reevaluating their policies due to grid strain and carbon concerns. This scarcity directly impacts mining profitability — especially for proof-of-work (PoW) assets like Bitcoin.
Moreover, the push toward greener energy sources means miners must either invest in renewable infrastructure or pay premiums for clean energy compliance. While this trend supports long-term sustainability, it also raises the barrier to entry for smaller operators who lack capital.
Efficient energy use is no longer optional — it's a competitive necessity. Mining firms that secure partnerships with solar, wind, or hydroelectric providers will gain a crucial edge in the coming years.
Rising Costs of Mining Hardware and Chips
Parallel to energy challenges, the cost of mining hardware — particularly advanced ASIC chips — continues to climb. Semiconductor supply chains remain strained due to geopolitical tensions, high R&D expenses, and concentrated manufacturing control.
Li noted that next-generation mining rigs equipped with cutting-edge chips (e.g., 3nm or 2nm process nodes) come with significantly higher price tags. These chips offer better hash rates and energy efficiency, but their premium pricing favors well-funded players over independent miners.
Additionally, chip depreciation accelerates as newer models launch more frequently. This rapid obsolescence forces miners to constantly reinvest in upgrades just to stay competitive — further squeezing profit margins.
For many small-scale operators, this creates a vicious cycle: higher upfront costs, shorter hardware lifespans, and declining returns per unit of computation.
Bitcoin Halving: A Looming Revenue Challenge
One of the most predictable yet impactful events in the crypto calendar is the Bitcoin halving — a programmed reduction in block rewards that occurs roughly every four years. The next halving is expected around 2028, which will cut miner rewards in half once again.
Alan Li stressed that this event will intensify the existing pressures. With revenue halved but operational costs rising, only the most efficient mining operations will survive.
“The time to act is now,” Li said. “Miners should consider deploying computational power during market downturns when hardware prices are lower — essentially ‘buying the dip’ in terms of infrastructure.”
This strategy allows operators to lock in favorable conditions before the next halving accelerates industry consolidation. Early movers who scale efficiently today will be best positioned to weather future volatility.
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Strategic Opportunities Amidst the Squeeze
Despite the challenges, Li remains optimistic about the long-term outlook — provided miners adapt strategically. He highlighted several key opportunities:
- Geographic Diversification: Expanding into regions with surplus energy capacity or government incentives can reduce dependency on volatile markets.
- Infrastructure Partnerships: Collaborating with data centers or energy providers enables shared resource optimization and cost savings.
- Secondary Markets for Used Hardware: Reselling or repurposing older equipment can recoup some investment and support emerging miners in developing economies.
- Integrated Mining Solutions: Platforms offering turnkey services — from hosting to maintenance — reduce operational complexity and improve uptime.
These approaches reflect a broader trend toward professionalization in the mining sector. The days of garage-based mining rigs are fading; the future belongs to institutional-grade operations built on data-driven decision-making.
Core Keywords Driving Industry Evolution
To align with search intent and enhance SEO performance, key themes emerging from this analysis include:
- Cryptocurrency mining
- Bitcoin halving
- Mining profitability
- ASIC chip costs
- Energy efficiency in mining
- Mining hardware investment
- Future of Bitcoin mining
- Sustainable crypto mining
These terms naturally appear throughout the discussion and reflect both technical considerations and strategic planning essential for modern miners.
Frequently Asked Questions (FAQ)
Q: What does “neijuan” mean in the context of crypto mining?
A: "Neijuan" refers to intense internal competition within an industry where participants work harder but see diminishing returns. In mining, it describes a scenario where rising costs and falling rewards force operators into a race for efficiency without meaningful profit growth.
Q: How will the 2028 Bitcoin halving affect miners?
A: The halving will reduce block rewards by 50%, directly cutting miner income. Combined with rising energy and hardware costs, only highly efficient operations will remain profitable unless Bitcoin’s price increases substantially.
Q: Is it still worth investing in mining hardware today?
A: Yes — but timing matters. Experts suggest deploying capital during bear markets or periods of low demand when hardware prices drop. This “buy-the-dip” approach maximizes long-term return potential ahead of the next bull cycle.
Q: Can renewable energy solve mining’s sustainability problem?
A: Renewable sources like solar and wind can significantly reduce carbon footprints and stabilize energy costs over time. However, initial setup costs and intermittency issues require careful planning and storage solutions.
Q: What role do ASIC chips play in mining competitiveness?
A: ASICs (Application-Specific Integrated Circuits) are specialized chips designed solely for mining. Newer models offer superior performance and efficiency, giving operators using them a clear advantage in hash rate and power consumption.
Q: How can small miners compete with large-scale farms?
A: Small operators can join mining pools to combine resources, leverage hosted solutions to avoid infrastructure headaches, or focus on alternative PoW coins with lower entry barriers until they scale up.
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Conclusion: Adaptation Is Key to Survival
The message from Jsbit’s CEO is clear: the era of easy profits in cryptocurrency mining is over. The convergence of energy scarcity, rising chip costs, and the approaching Bitcoin halving demands a new level of sophistication from market participants.
Success will belong not to those who mine the most, but to those who mine the smartest — optimizing every watt, maximizing uptime, and planning years ahead. For forward-thinking operators, these challenges also present opportunities to innovate, consolidate, and lead in an increasingly competitive digital gold rush.
As the industry evolves, staying informed, agile, and efficient will be the true keys to long-term profitability in the world of crypto mining.