In 1848, a carpenter named James Marshall discovered gold in a riverbed in California. In a matter of months, tens of thousands of folks—farmers, blacksmiths, and even lawyers—dropped everything and rushed west to claim their share of earthly riches. It was, well, the goal rush. It was partly responsible for the expansion of the US in that wilderness. And that obsession, that “fever”, reshaped the history and geography of a nation.
The gold rush was responsible for the US’s expansion to the West. It was responsible for towns, cities, and infrastructure. The railroad, in part, was diverted so it would cross these regions. Financial institutions were born and raised during this time. Without James Marshall and his find, the United States would be a pale shadow of itself. Why are we talking about gold when this article is about crypto mining? Well, because it’s important to understand the precedence of what a find or what a “fever” leads a nation into.
It’s important to understand how that nugget, in California, changed the global economy and recreated history. Now, we’re in the digital era — one where gold is still king and a great commodity but where it has competition. Let’s jump on our time machine and skip a few centuries and fast forward to 2009. In that year, a different kind of gold rush was quietly ramping up.
This time, the gold was digital, the river beds were lines of code, and the prospectors were a ragtag group of tech fans mining a new kind of asset: Bitcoin. They were crypto mining — but what is it and what does it entail? Let’s dive in.
At first, mining was simple. Early adopters could fire up their personal computers and earn 50 BTC per block, a fortune by today’s standards. Back then, you needed just that to buy a pizza. Today, you could probably buy a small island with that much BTC. But just like the original Gold Rush, competition skyrocketed.
People got smarter. They built better tools. Mining became an industry—one that now consumes more electricity than entire countries and is maddeningly competitive, requiring specialized hardware and low-cost power sources to turn a profit.
To what point did mining become a trend? Let’s just say it went from being a niche hobby to a global phenomenon that captured the attention of tech enthusiasts, investors, and entrepreneurs alike. Today, mining Bitcoin with an off-the-shelf laptop is a pipe dream.
Yet, despite the complexity, controversy, and computing arms race, crypto mining remains the backbone of decentralized digital currencies. It’s what keeps the system trustless, secure, and running without the need for banks or middlemen.
But how does it actually work? And more to the point, is it still profitable in 2025? Let’s break it down.
At its core, crypto mining is the process of using computational power to validate transactions, secure the blockchain, and generate new digital coins. It’s basically giving up part of your server and computing power to the blockchain. It’s that simple.
It serves three key objectives:
Without mining, cryptocurrencies like Bitcoin, Ethereum Classic, and Litecoin wouldn’t function.
Most people acquire cryptocurrency by simply buying it on an exchange like Binance or Coinbase. But mining is a completely different game. It’s the difference between, well, going to the corner jewelry shop and buying a gold ring, and getting on a donkey, traversing the great outdoors, and pitching a tent and getting out your pickaxe.
Mining is essentially the backbone of the blockchain—keeping it functional, secure, and trustless. It’s also a way of, well, hitting it big. But, like the gold rush, part of the reason gold is so expensive right now is because we’ve tapped out all the veins — and new ones are hard to find.
The same with cryptos. There was such a mad dash rush for it, such a fever, that well we ended up tapping all the veins, and like any market it is driven by demand - which is at an old-time high due to speculation and other factors - and supply - which is at an all-time low.
To understand how mining works, let’s break it down into four key steps.
When you send Bitcoin, your transaction doesn’t automatically get recorded. First, it goes into a waiting room (the mempool) where it waits to be verified by miners.
Miners check two things:
Only valid transactions move forward.
Once transactions are verified, miners compete to solve an insanely difficult mathematical problem.
Once a miner finds the correct solution:
This cycle repeats every 10 minutes for Bitcoin, every 2.5 minutes for Litecoin, and at varying speeds for other cryptocurrencies.
Hardware, here's where things get iffy — why? Because there’s controversy, there’s fanaticism, and there’s obsession. Every miner will tell you their hardware is the best. And for them it is. It’s important to note that. Regardless of where you fall, what’s important to highlight is that not every hardware is the same. There are nuances.
Here’s what you need to know.
This is partly why companies like NVIDIA have become the Belle of the Ball in the stock market. The reason why they’re always going gangbusters and selling out is that miners need their GPUs. In this mad rush, the companies that supply the workers are the real winners.
Yes—but only if you do it the right way. There are things you have to consider. Let’s go through them.
Conclusion? Cheap electricity is the key to success. Also, this is one of the reasons why miners are so attracted to alternative energy. Solar panels, wind turbine, heat for pools. Yes, heat from pools. Some bathhouses actually convert part of their energy output - from the heated pools - to mine BTC. Others have even gone so far as to create environments where the actual computers, and the heat radiating from them, end up creating the heat that will later be converted into energy to mine the coins —- wild, right?
Cloud mining lets you rent mining power instead of buying hardware. However, most cloud mining services are scams or barely profitable, making them a risky investment. Unless you're comfortable gambling with your money, it's best to avoid it.
Staking allows you to earn rewards by locking up your coins in Proof-of-Stake (PoS) networks, like Ethereum 2.0, Cardano, and Polkadot. It’s a more energy-efficient alternative to traditional mining and offers a greener way to participate in crypto.
Artificial intelligence is already playing a critical role in optimizing mining operations. AI-powered algorithms are being developed to:
AI-driven mining software can analyze massive datasets to adjust mining strategies automatically, identifying the most profitable times to mine based on market conditions, mining difficulty, and electricity costs.
Companies like NVIDIA and Bitmain are integrating AI into their latest mining rigs, using machine learning models to optimize energy use and cooling efficiency. AI-driven chips are expected to cut energy consumption by up to 30%, which could mean higher profits for miners and lower strain on power grids.
Quantum computing is a looming wildcard in the crypto industry. Unlike traditional computers, which process information using binary bits (0s and 1s), quantum computers use qubits, allowing them to perform complex calculations exponentially faster.
This could pose a serious risk to cryptocurrencies that rely on cryptographic security—if a sufficiently advanced quantum computer were developed, it could theoretically:
However, blockchain developers aren’t sitting around telling bar stories and playing with their thumbs. Research into quantum-resistant cryptographic algorithms is underway, with new encryption methods like lattice-based cryptography and post-quantum signatures emerging as possible solutions.
Prediction: Quantum-resistant blockchains will likely become the norm within the next decade, ensuring that crypto remains secure in a quantum-dominated world.
Crypto mining has been controversial, to say the least — criticized for its massive energy consumption. Bitcoin mining alone consumes more electricity than Argentina, leading to government crackdowns and concerns about its environmental impact. Part of the reason why Elon Musk flipped on allowing people to pay for Tesla cars with cryptos is due to this.
However, a growing number of mining operations are shifting toward renewable energy sources to stay ahead of regulations and cut operational costs.
Some regions have become global leaders in sustainable crypto mining due to cheap, renewable energy sources:
Beyond shifting to renewable energy, mining companies are developing cutting-edge solutions to minimize waste and maximize efficiency:
Mining isn’t what it used to be, but for those who play it smart, it can still be a serious moneymaker. The truth is that everyone is doing it now. In some countries like Venezuela, it’s a huge business. Why? Electricity is at an all-time low, there’s little to no government oversight, and you can rent - or even buy - property for a crypto-mining server farm for pennies.
To what extent? Despite being outlawed - due to energy usage - it’s still heavily supported by the government on the down low. Why? It’s the lifeblood of many. Regulations have failed. And in a country with financial bans and international boycotts and embargoes, cryptos have become the only way to operate financially in many parts of the nation.
So, should you mine? Well, it all depends on where you are going to set up shop. Do the math. Run a simulation with ChatGPT or any AI powerhouse and get the stats based on your region and location.
Pickaxe Mining Inc. © 2025
Pickaxe Crypto Mining does not sell or offer investment products, financial advice, or tax advice. Our services are limited to the sale of crypto mining equipment and hosting solutions. Customers should conduct their own research and consult with a qualified financial and tax advisor before engaging in cryptocurrency-related activities
