Quicker than IT services, but Bitcoin mining’s growth could have these implications

A couple of years ago, the idea of a new volcanic geothermal Bitcoin mining facility would make a good science fiction plot. As this dream becomes reality after the announcement by El Salvador, the world’s first country to legalize Bitcoin as legal tender, one can only imagine its growth trajectory. 

Bitcoin mining has been a sensitive subject in the crypto-verse owing to the environmental concerns surrounding the process. Just last month, reports highlighted how BTC miners were producing 30,700 tonnes of e-waste each year – Equivalent to 272g per transaction. On the contrary, an iPhone 13 weighs 173g. 

Mining growth to boom by 2027

This, however, has not deterred miners and mining pools. Notably, the global cryptocurrency mining machines market was valued at over $11 billion in 2019. It is projected to go close to $22 billion by 2027. This represents a CAGR growth of 11.56% from 2020 to 2027.

In comparison, it is worth noting that the largest IT services market is in North America which has a CAGR of 10.36%. This suggests that BTC mining is expected to grow at a much faster rate when compared to IT services.

Additionally, the global cryptocurrency mining hardware market is expected to grow by over $2.80 billion between 2020-2024. 

Source: Technavio

However, with Bitcoin mining getting harder and less profitable, a lot of enthusiasts have set their sights on cloud mining – A relatively new phenomenon.

In fact, over the last couple of years, cloud mining has emerged as a way to make steady passive income from the crypto-space. 

Cloud mining as passive income

Much like other investments options, cryptocurrencies too offer investors a chance to earn passive income by staking, airdrops, and cloud mining, among others. Notably, general interest in cloud mining has grown over the last few years. Especially since the market saw more volatility and participants felt the need to park funds in more streamlined forms of income. 

Cloud mining gained mainstream traction as they are seen as being more cost-effective and provide an easier entry into the BTC mining sphere. Cloud mining companies perform maintenance and cutting entry costs for new members while using smart algorithms to choose more profitable strategies.

Further, it offers environmental benefits and sustainability by optimizing mining hardware and taking advantage of the local climate. Some of the top market players in the space include BitMain Technologies Ltd, Shamining, and MinerGate. 

An effective scam method too?

Since the space is still maturing, Cloud Mining scams have been the most effective way to steal new users’ Bitcoin. There are a huge number of BTC cloud mining sites (most of which are scams) that lure new users into the space.

In fact, the FTC’s Consumer Sentinel report found that scammers have been cashing in on the buzz around cryptocurrencies and luring people into investment opportunities in record numbers.

From October 2020 to March 2021, these cases skyrocketed, with nearly 7,000 people reporting losses of more than $80 million in such scams.

Source: Federal Trade commission

Thus, while the Cloud Mining space offers interesting and high returns, pinpointing the one that suits one’s needs and offers a secure entry is of utmost importance.

Nonetheless, the fast-paced growth of the sector does highlight the growth potential of the industry.