Some miners unprofitable below $8000

Bitcoin mining is slowly becoming like real mining. Gone are the small-scale miners as they're replaced by massive operations with scale and cost-controls.

Smaller miners will drop out, and only five to 10 of the largest will survive and be profitable, according to Silicon Valley venture capitalist Bill Tai who serves as chairman of Hut 8 Mining Company, who spoke to Bloomberg.

He talked about the advantages of a few firms:

"Unlike smaller miners, which buy hardware from other manufacturers, Bitmain and Bitfury design and make their own chips and machines. The large players also can place huge orders for parts and even buy electricity at a discount."

Who this shakes out could dictate what's next for Bitcoin. Some estimate that miners hold 20-30% of all Bitcoin and if operations are forced to shut or are unprofitable, they may have to sell. They will also remain a powerful voting block for any changes to the protocol.

Today, Bitcoin is up $200 to $8115 as the gains from the start of this week consolidate.