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While MARA Holdings and Riot Platforms diversify into AI and global energy deals, independent Bitcoin (BTC) miners are fighting to keep the lights on. This gap highlights an unsettling reality: Bitcoin’s long-term sustainability is in danger. While Bitcoin’s steadily rising hashrate is often celebrated as a sign of the network’s health — even amid turbulent markets — it tells half the story. Equally important, and far more concerning, is how that hashpower is distributed.
Summary
- Small miners face mounting pressure — rising energy costs, volatile markets, and competition from capital-rich mining giants threaten their survival.
- Major firms have deep buffers — renewable energy deals, global diversification, and ventures into AI data centers help them weather market downturns.
- Merged mining is a lifeline — it lets independent miners earn from multiple blockchains without extra energy or hardware, boosting margins in tough cycles.
- Decentralization depends on small miners — sustaining diverse participation via merged mining strengthens Bitcoin’s resilience against centralization.
As the bear market persists, small and mid-sized miners are facing mounting pressures from rising costs, geopolitical uncertainty, and relentless competition from well-capitalized mining giants. In this environment, merged mining — a technique that allows miners to use the same infrastructure to secure other blockchains simultaneously — has become a critical lifeline. By unlocking new revenue streams without additional energy or hardware costs, merged mining helps sustain the profitability of independent miners and, by extension, preserve the decentralized foundation that the Bitcoin network depends on.
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Major mining firms vs. Small-time miners
Leading mining companies have used their scale and corporate reach to secure key advantages over smaller firms and independent miners — especially when it comes to surviving tough market cycles — leaving smaller, independent operators struggling to keep up. While independent miners often depend on razor-thin margins, major mining companies have the scale, capital, geographic reach, and the capability to pursue sophisticated treasury management and hedging strategies that insulate them from entire market cycles.
Take mining giant MARA Holdings, for example. The firm has aggressively expanded its use of renewable energy, acquiring a large facility in Texas and entering into a landmark partnership with the government of Kenya to both bolster renewable energy production and establish a renewables-powered mining operation. By diversifying across jurisdictions and securing access to cheap, renewable power, Marathon can hedge against the kind of energy price shocks that might shutter smaller mining outfits.
Some firms are even going a step further, expanding into entirely new industries. In February, Riot Platforms announced plans to build AI data centers — pivoting into artificial intelligence infrastructure to capitalize on the surging demand for high-performance computing. These new revenue streams, largely disconnected from Bitcoin or crypto markets, give Riot an additional buffer during downturns and reduce the company’s reliance on Bitcoin’s price performance alone.
Large mining companies are also uniquely positioned to negotiate direct partnerships with power producers — something small, independent miners simply cannot do. In many cases, they’re able to secure favorable energy rates or receive tax credits from local governments eager to attract high-tech infrastructure. Riot Platforms, for instance, has collected nearly $136 million in power credits from the Texas grid operator since 2022. These advantages, combined with operational scale, allow major firms to weather downturns that would be catastrophic for independent miners with fewer options and thinner margins.
Independent miners don’t enjoy such luxuries. They face steep electricity costs, volatile energy prices, and expensive tariffs on mining hardware — expenses exacerbated by the ongoing market volatility and a looming trade war. These mounting pressures threaten to drive independent miners to extinction, consolidating hashpower among a few, well-positioned firms, and drawing Bitcoin’s decentralization into question.
Merged mining offers independent miners a lifeline
Merged mining has quietly emerged as a powerful tool for independent miners looking to stay competitive. At its core, merged mining allows miners to reuse the same computational work they perform to secure Bitcoin in order to mine other Bitcoin-compatible blockchains — without requiring any additional energy or hardware. This process effectively creates a parallel revenue stream, enabling miners to earn rewards from multiple networks simultaneously.
For small-scale and independent operators, this added income can be the difference between shutting down and staying online. It cushions the impact of Bitcoin’s fluctuating block rewards, offering a more stable financial foundation during prolonged downturns or post-halving squeezes. By increasing earnings without increasing operational overhead, merged mining helps level the playing field — giving smaller miners a way to remain viable even as larger firms consolidate more control.
Smaller miners also have a distinct operational edge. They’re typically more nimble than institutional players, allowing them to adopt strategies like merged mining more quickly and without bureaucratic drag. While major mining firms must navigate complex infrastructure, independent miners can pivot faster — reconfiguring their setups and testing new protocols directly.
In many cases, these smaller players are closer to the metal: hands-on, experimental, and focused on squeezing out every bit of value. That agility enables them to iterate quickly, fine-tune merged mining configurations, and capture returns that big operations may overlook.
In an environment where every margin matters, merged mining isn’t just an optimization — it’s a lifeline. And in a decentralized network like Bitcoin’s, the resilience of smaller, independent miners isn’t just good for competition. It’s essential to the health of the ecosystem.
A crucial component of Bitcoin’s long-term sustainability
Diverse miner participation is Bitcoin’s strongest defense against centralization. When control over mining is concentrated in the hands of a few large, corporate entities, the network becomes more susceptible to censorship, manipulation, and external political influence.
As price volatility persists and competition intensifies, it’s time for the Bitcoin community — developers, miners, and advocates alike — to fully embrace merged mining as a core pillar of the network’s sustainability. Supporting small miners isn’t just a matter of fairness or sentiment; it’s essential to Bitcoin’s long-term viability as a truly decentralized, global financial system.
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Spencer Yang
Spencer Yang is the co-founder of Fractal Bitcoin, a Bitcoin-compatible protocol focused on scaling Bitcoin through recursive layers, enabling internet-scale applications while maintaining Bitcoin’s core principles.
