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The biggest effect that cryptocurrencies had was on the graphics cards industry. Because of the profits to be earned by the graphics cards through mining, everyone was buying as many graphics cards as possible.
At first, people were mining in their homes, however as more investors and well-resourced miners got involved, mining farms came into existence. Where literally hundreds or even thousands of these graphics cards were put together in large warehouses to mine every cryptocurrency under the sun. The large investment made sense because of the return that the mining produced. That was true over a year ago.
However, 2018 has seen a huge decline in cryptocurrencies’ value. Bitcoin went from around $20,000 in December 2017 to $4,000 in December 2018. All the other cryptocurrencies have seen a similar trend in their prices. This downtrend has affected the mining industry. A recent study says that a recent 15% drop in the value of Ethereum has now made mining the network no longer profitable. The question arises if that is true for Ethereum and all the other cryptocurrencies. The answer by many experts is invariably Not exactly. When it comes to Ethereum mining or any other cryptocurrency for that matter, the most important factor is utilizing the pre-existing natural and policy conditions.
Mining farms have always been built in a concentration in areas where the price of electricity is low. Low natural temperature is another major factor that attracts mining farms to certain areas. Below or around zero Celsius temperature means the cost of cooling the mining graphic cards is very low.
DecryptMedia.com quoted Software Engineer and Ethereum miner Greg Meszaros, founder of Omegapool, saying, “It’s still profitable in Venezuela, Ukraine, China, and Canada. The price of electricity in Ukraine is $0.03 per kWh compared to the U.K. where it’s about $0.18 per KwH.” This means that many large operations are still earning enough profits to justify continuing their operations.
On the other hand, small-time miners who have a rig set up under their table with only one graphics card might be in trouble. While a home miner was able to make $2-3 per day from a single graphics card, today that amount has come down by a lot. Although, there are some unique ways that miners are still using the mining to save themselves money.
Mark Laurence, CTO at Blackcore Technologies, runs an Antminer E3, which is a mining machine built by Bitmain to mine Ethereum. Laurence says that he is saving the cost of heating up his house through mining with his 30 GTX 1070’s.
Whether or not crypto mining is profitable for the home miner, cryptocurrencies rely on mining to function. Which is why saying that crypto mining is dead is not accurate. Where there is demand, there is supply. If small-time home miners are discouraged from mining, cryptocurrencies and their parent companies will just end up hiring other server manufacturers and mining farms to do the mining for them. Which means mining is not going anywhere. It’s just the miners who might change.