Bitcoin mining is becoming more expensive, according to JPMorgan. 
That's because miners are "currently in a hash rate arms race."


Bitcoin miners are in an arms race and it is driving the cost of minting new bitcoin to all-time highs. 
That's according to a big report on cryptocurrency out Friday by financial giant JPMorgan.
Miners are the folks who unleash new bitcoin into the universe by running computationally intensive algorithms on systems called rigs. The miners pumping out the most computing power — or "hash rate," referring to how many cryptographic calculations the machines can do per second — have the best chance of earning a new bitcoin. As such, miners are building more and more rigs to one-up their competition. 
"The industry is currently in a hash rate arms race, as the current bitcoin price is incentivizing the addition of more and more mining capacity," the report said. 
That doesn't mean more bitcoin are being created. The coin's network is designed to increase the difficulty of successfully mining a coin as the total hash power increases in order to maintain a more or less steady rate of bitcoin creation. More hash power means higher energy costs. As such, the cost to mine one bitcoin has increased dramatically. 
"If this growth in hash rate continues (as it likely will if margins stay positive) without an offsetting increase in energy efficiency of miners, average costs globally will continue to rise," the bank found. 
Already, the bank estimates the price of mining one bitcoin has jumped 10-fold over the last year.
The bank estimates that the price to mine a single bitcoin is approximately $3,920 a coin. That varies depending on geography and energy costs, however. Take a look at the chart:
Join the conversation about this story » NOW WATCH: Don't let stretched valuations keep you from betting on high-profile tech and media stocks, says CFRA

More Stories

Business Insider - Finance: Thursday February 22, 2018

Bug at Japanese Government-Approved Zaif Exchange Let Users Get Free Bitcoin

An apparent software bug at the Japanese government-approved bitcoin exchange Zaif allowed users to get cryptocurrency for free.

Business Insider - Finance: Thursday February 22, 2018

Here's what Lloyds' $4.2 billion digitization pledge says about banking's future

The new plan seems like the latest effort by the bank to streamline its operations and face down growing competition

Business Insider - Finance: Thursday February 22, 2018

Snap is sliding after Kylie Jenner tweets she doesn't use the app anymore (SNAP)

Kylie Jenner is one of the biggest influencers on Snapchat.

Business Insider - Finance: Thursday February 22, 2018

Fintech Temenos to Acquire Fidessa Group for $1.96 billion

Swiss Fintech Temenos has agreed to buy UK based Fidessa Group in a deal that currently stands at $1.96 billion. Temenos is a provider of banking software and the company claims that more than 2000 firms around the globe, including 41 of the top 50 banks, use the Temenos software to power daily transactions. Fidessa,

Business Insider - Finance: Thursday February 22, 2018

Sweden-Based Fintech Anyfin Secures 4.8 Million Through Series A Round Led By Accel & Northzone

Anyfin, a Sweden-based fintech startup that enables consumers to refinance their existing loans with a picture, today announces a 4.8 million Series A investment led by Accel and Northzone...

Business Insider - Finance: Thursday February 22, 2018

Bitcoin just fell below $10,000 again

Bitcoin fell below $10,000 for the fourth time of 2018 on Thursday morning.