The profitability of mining has dropped

The profitability of mining has dropped

Experts told about the current situation with mining bitcoin and other cryptocurrencies, as well as the prospects for its further development At the same time, the fall in cryptocurrency rates this year, the increased complexity of mining and the increase in hash rates to record levels have led to a significant drop in revenues from mining digital assets. At $20k per bitcoin, the profitability of mining businesses is already close to the cost of production (around $15-17k), and in some cases is going into negative values.

But even despite the drop in revenue, the mining industry in Russia continues to grow. Experts told RBC-Crypto about the current situation in the bitcoin and other cryptocurrency mining industry and its future prospects.

Current yield
Calculation of profitability per device on the example of ASIC-miner Bitmain Antminer S19j pro with a computing power of 100 terraches per second (th/s) resulted the director of the online store of equipment for mining and computer components "Hardvar"

Subtracting the cost of electricity from the revenue, we get $110. - That's the net daily income per miner today if you exchange bitcoins at once.

If you save some BTC and pay for the electricity from your own resources, then a year of continuous work for one device will accumulate approximately 0.08895 BTC.

The expert noted that, taking into account the increasing difficulty of mining the cryptocurrency and the assumption that bitcoin will cost $100 thousand a year, the net income from a miner, minus electricity costs ($2 thousand) would be about $6.9 thousand.

The current cost of the Bitmain Antminer s19j pro (100 th/s) device is about $2.5 thousand. Accordingly, if you accumulate bitcoins, you could get a good profit when the bitcoin price reaches $100 thousand.

At the same time, he pointed out that the considered model of the device is not of the latest equipment generation. According to the expert, nowadays there are more energy efficient devices and, consequently, in the future they may be even more interesting.

Investments in the bear market
Today is a good time to enter the market, as CEO of Intelion Data Systems also noted. Despite the height of the bear market and the fact that the yield of the leading cryptocurrency leaves much to be desired, a lot of equipment is being launched around the world now.

The specialist specified that the cost of the devices is now 3.5-4 times lower than a year ago. The equipment purchase in the current situation should mean a calculation on the investment with 2.5 years period with a perspective on the future market growth after the end of the current bear cycle.

At the same time, the important thing when planning investments in mining is to purchase the devices in stages, the specialist explained. It is recommended to purchase equipment every 3-4 months. And some of the liquidity should be saved for the periods of possible even greater fall in the value of the equipment, because the ideal entry point is almost impossible to predict, said the expert.

He also pointed out that using mined cryptocurrency to pay for electricity and hosting (equipment placement) will not be the right decision. According to the expert, these bills should be paid by other revenues.

It is better to postpone the sale of mined coins until the period when BTC rate goes to the growth phase, in this case, the capacity purchased in the low market will be able to show excellent profitability for its owner.

Mining forks of Ethereum and other altcoins
The Ethereum network's transition to the Proof-of-Work protocol has also had a negative impact on miners using the corresponding equipment. Despite the fact that many of them switched to mining such other altcoins, revenues from this type of mining decreased markedly.

After Ethereum switched to PoS, video card mining (GPU) is in a fiasco, the BitCluster co-founder stated. According to him, there are no prerequisites for cryptocurrency mining on video cards to become profitable again in the near future.

The director of the online store Hardvar agreed with the previous expert. He noted that to date in the area of mining altcoins and Ethereum forks on GPUs, after paying electricity costs, there is not a single algorithm that works in the plus. According to the expert, with such mining, you need to pay extra "for the outlet".

Such a drawdown of profitability on the GPU has never been in history, now some of the miners are selling their equipment, while others are saving it for better times. At the same time, the expert added that, judging from the history of the crypto industry, at some point good times may come again.

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Author: soft4bro

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