Why despite the emergence of POS-mining and other algorithms, bitcoin continues to work at the POW algorithm and burn megawatts of electricity? It may be wise to switch to another algorithm, disable mining farm and enjoy the peace and ecology?
In this article we tell you why mining bitcoin is important and it will continue to evolve. Also will look to whether there is still the opportunity to come to this market to private miners. Whether to mine bitcoin or it’s time to look at other cryptocurrencies? We will discuss separately what the mining prospects for 2020 and beyond.
Let’s start with Hasrat bitcoin. Open schedule and what do we see?
After setting a new record of 114 EH/s, the network capacity has literally fallen to 78 EH/s, however, then rebounded slightly. Let’s think about why it happened?
Hasrat bitcoin jump constantly and that’s fine. The fact that the miners not only mined bitcoin on the same ASIC miners with the same success it is possible to produce, for example, Bitcoin Cash. The main thing is to make the hashing algorithm match, and switch to mining other cryptocurrencies will not be difficult. That, in fact, do many of them, especially those tied to mining giant Bitmain, because this company has been openly supports Bitcoin Cash. So as soon as the price in one way or another cryptocurrency with similar algorithms goes up or down, the miners simply select the network where you can get more profit at the moment.
Another reason for such a sharp decline Hasrat could be some natural disaster or another reason that led to the shutdown of a large mining farm, most likely Chinese. Because there are concentrated the main world power for mining bitcoin. Such was the case when flooding washed away a large mining farm, or when one of them was destroyed by a fire. This time there were no reports about such disasters, but do not forget that China is going to withdraw from the shadow of all miners, for which they have checkpoints, perhaps some objects were temporarily shut off its power with this purpose.
But overall, and this is both good and bad, the development of the mining industry is in full swing. In business again back the good old Jihan Wu, who again took the post of Director General of Bitmain:
As they say, less than six months, although about as much time has passed since the departure of Jihan from this position. The company then thought to switch on developments in the field of artificial intelligence, but now again announced a policy of production of new ASIC devices. In addition, the company decided to issue shares and become public, which filed for an IPO in the United States and even attracted the support of German financial holding company Deutsche Bank.
This behavior can be called Bitmain expected, because of their superiority on the market have threatened competitors of the company Canaan Creative. First they boasted that they have a pre-order for 500,000 new ASIC Cove of its own production. And then filed for IPO in USA, trades I plan to hold on the NASDAQ and was going to raise $400 million.
Well, the main news from the world of mining. Most likely, you’ve heard a story about how the Russian Internet Ombudsman Dmitry Marinichev helps to build the country’s largest mining-farm on the basis of idle aluminum plant in Karelia. I wonder, what does the Internet Ombudsman is mining, which is in the country it is unclear what rights. Hmm… The Roof?
But really the main latest news from the world of mining we call a statement an influential Chinese official, the fact that in Sichuan province, which produces most of bitcoins, there are still reserves in the form of an overabundance of electricity produced.
It radically negates the previous news about the desire of the Chinese authorities to force the miners from the country. Apparently, they decided to use the principle that if you can’t stop, then it’s worth the to lead. And now the TOP 1 miner in the world, China may try to become a monopolist in this market.
Is it possible to compete with those whose mining farm occupy space comparable in size with the industrial plants? Clearly, no. And sad as it was, but Satoshi Nakamoto conceived all very different.
Initially it was thought that everyone will mine on your home PC, thus maintaining network security. But the growth rates of the first cryptocurrencies were those who made mining his business, with the result that the industry has come to the advent of ASIC devices. These powerful processors are no longer capable of that, except to calculate the hash of the next block of bitcoin, but with this task, they do perfectly.
And what about those who worked in this market before, or only now learned about it and decided he wanted to try? The answer is and it may make a profit.
Let’s start with the fact that there are pools for mining. After all, private lonely miner a chance to mine a block bitcoin, and other less popular crypto currency, the same broadcast or litecoin the situation is the same. Alone can not survive, but you can connect to the pool and get a part of his earnings depending on the share of your mining farm in the total power pool. That is, work is still really important but the question of profitability. Therefore, the modern miner in 2020 will definitely need business skills, which will consider how much to invest, what will be the cost and how much profit can be obtained at the output.
As for the strategy of earnings, they are actually two:
- The first is the constant switch from one cryptocurrency to another, depending on the current capacity of their network and the cost of the us market. Minim what is profitable right now and then sell. The farm in this case is gathered from the cards to have maximum flexibility in the choice of the mined cryptocurrency.
- The second strategy involves working for the future and for those who believe in the same bitcoin, Ethereum, Litecoin or Bitcoin Cash in the long run, even if your farm is running at a loss and you provide it at my own expense. But after growing cryptocurrency market all this will be compensated with a big impact. Of course, such a strategy fits in that case, if your farm is not profitable, but you still get the cryptocurrency cheaper than it costs on the exchange. And if not, then unplug from the outlet and just invest on strategy HODL.
- There are, of course, a third option, when you have mining hardware owned and you are just renting it for a fixed amount. You its earned, and the tenant gets a profit or not is not your concern.
And, finally, talk about why you should not write off from accounts of mining, and to succumb to the propaganda of ideas of what is expensive, spend a lot of electricity and generally it’s time to change something.
So here’s three reason why classical mining algorithm Proof-of-Work will not disappear.
First, bitcoin clearly proves that it is the most reliable defense mechanism against possible attacks on the network.
Secondly, the issue of cryptocurrency using POW-mining is actually generating its cost of recycled electricity, for which you need to pay. You can consider it the greatest stone to the cryptocurrencies algorithm Proof-of-Stake, but where there are new coins? Just because you’re done, you have to account for cryptocurrency and here you go for it? Only this resembles the printing of paper money by Central banks, because they have such a right, that print.
And the third argument in defense of mining. When you once again will tell you how much he requires of electricity. Remember that the world now produces more than is consumed. And everything is relative, because the lighting and appliances in the branches of the Bank spends much more electricity, but no-one accuses them of unnecessary consumption of resources. And how much electricity we spend on maintenance of the offices of the officials?… but that’s another story.