Galaxy Research head Alex Thorn has highlighted a fundamental divergence in the trajectories of Bitcoin mining and artificial intelligence (AI) development. According to Thorn, Bitcoin mining, which began as a decentralized activity on personal computers, has evolved into a highly centralized industry dominated by specialized ASIC miners and industrial-scale farms.
"AI may follow the opposite path," Thorn stated, explaining that AI development started centralized within giant data centers. However, as frontier models encounter "data scarcity, context limits, and memory bottlenecks," open-source models are closing the performance gap. Thorn suggests that "If local models keep getting smaller, cheaper, and more efficient, AI may become increasingly personal and on-device."
This trend is supported by projections for the Edge AI market, which involves running AI models directly on local devices. Grand View Research (GVR) anticipates this market will surge from about $25 billion in 2025 to $119 billion by 2033, representing growth of roughly 300%. GVR attributes this boom to the rapid expansion of the Internet of Things (IoT), demand for real-time data processing, and a "rising focus on data privacy and localized intelligence at the network edge."
Meanwhile, Bitcoin mining is experiencing a different form of decentralization: geographic dispersion. A report from crypto exchange KuCoin notes that soaring energy costs in the United States have made mining unviable in some regions, with the cost to produce a single Bitcoin exceeding $100,000. This is driving a migration of hash rate toward the "Global South," with Paraguay and Ethiopia emerging as leading destinations due to their surplus hydroelectric power.
KuCoin's report states that "this decentralization of mining power across different continents enhances the security of the network by making it less vulnerable to any single country’s political or environmental shocks." While this geographic shift may mitigate some risks, Thorn's analysis suggests the industrial centralization of mining hardware ownership remains a core concern for Bitcoin's long-term resilience and its foundational promise of decentralization.
