In 2020, mining is going through hard times, due to the general stagnation in the cryptocurrency market, a significant decrease in its capitalization, an increase in the complexity of mining major cryptocurrencies, as well as the emergence of a large number of ASIC devices that have collapsed the profitability of mining farms on most cryptocurrency assets.
However, mining is still a profitable activity, provided you have access to relatively cheap electricity.
Predicting the future of cryptocurrencies is a thankless task, somewhat reminiscent of fortune-telling on coffee grounds, but, nevertheless, there are certain indicators that you can rely on when studying the issue of mining prospects.
When analyzing the possible future of mining, it is necessary to take into account the following factors:
All these factors affect the payback time of the equipment and the overall profitability of the mining business. Let’s try to figure out in more detail whether it is worth investing in cryptocurrency mining now.
In the near future, it is expected that many popular cryptocurrency platforms will be updated, as well as important decisions affecting the general state of the cryptocurrency market.
The upcoming Ethereum update will definitely reduce mining profitability. Making a positive ETF decision can significantly improve the health of the cryptocurrency market and, thereby, increase the profitability of mining.
The bitcoin rate, which fell significantly in 2018, largely repeats the situation in 2014-2015, when bitcoin fell sharply after it took off in 2013. It is difficult to predict when the next rise will come, but it is possible. If it comes again, the cryptocurrency mining business is likely to become profitable again.
The decision on whether to start mining this year needs to be made, taking into account the factors affecting the cryptocurrency market and the available financial opportunities. Given the unpredictability of the exchange rate in the long term, it is not worth taking loans for such a business.
The most reasonable decision to invest in mining would be to allocate an amount that is not so important in the short term and the implementation of mining for the long term or for trading on exchanges.
In 2021, the most profitable cryptocurrencies to mine according to Whattomine (if we take into account the seven-day mining period) are:
All these coins give a profit of about 100%, so it cannot be said that mining is now unprofitable. Most of these coins are constantly present in the top cryptocurrencies used for mining, so you can plan that such a business will consistently generate income.
When calculating a business plan for the development of a mining business, it is worth taking into account the factors indicated above, it will approximately be determined which cryptocurrencies will be the main ones for mining and to understand in more detail their prospects, including the complexity of mining.
When mining any cryptocurrency that is mined using a proof of work (PoW) algorithm, the complexity of mining must be taken into account. This indicator is associated with a growing increase in network power and algorithms for the functioning of blockchains of different cryptocurrencies, in which the block generation time should be performed in approximately the same time interval.
When the profitability of any coin increases, many miners “jump” to it, hoping to get a large profit. Often they do not win anything at the same time due to the fact that while they mine enough coins to exchange their rate will drop.
You can insure against this when using the Nicehash program, but at the same time you need to be ready to pay a commission and use not the most optimal video card settings to achieve compatibility with most mining algorithms.
As a rule, in the long term, miners receive less income from mining popular coins due to the increasing complexity of the network. This factor must be taken into account when calculating the profit from a mining farm for the long term. There are many resources on the Internet that allow you to study the difficulty graph for each specific cryptocurrency, and approximately understand how much profitability will decrease.
Let’s try to develop a mining business plan with calculating the cost of the farm and taking into account its payback.
The amount of the minimum investment in a mining business is related to the following factors:
If serious investments are planned in the mining business, then it is worth considering the possibility of using mining hotels that provide security and maintenance of equipment, which justifies the payment for their services, as well as think over a business mining plan in special containers.
When calculating a mining farm, you can take as a basis the cost of one rig, as a conventional unit used in mining. A typical rig might be configured like this:
The total cost of such a rig will be approximately $ 2340. You can save somewhere, buy better equipment somewhere. but the order of prices for the new rig will be something like this.
Taking into account the existing profitability of mining ether and other similar cryptocurrencies in terms of profitability, according to Whattomine, the daily income for such a business will be about $ 2.5 with an electricity cost of $ 0.06. Based on this data, mining a farm from one typical rig will pay off. 936 days.
Whether it is a lot or a little, everyone decides for himself. When planning investments in cryptocurrency mining, you need to consider fluctuations in their growth. Now the ether rate is about 300 dollars, and at the beginning of the year it cost on average 1000 dollars. After upgrading the network and improving the technical characteristics of the Ethereum platform, it may grow back to this value and even more.
There are many factors that allow us to hope for the further growth of cryptocurrencies, which will make the payback period much shorter, but no one can know for sure.
If you calculate a farm using ASIC equipment, then you need to take into account that the profitability of old ASICs is now very low, and new ones are likely to be profitable only in the next few months.
In this case, you need to take into account the time factor associated with the supply of new equipment, customs clearance, the cunning of Chinese sellers and more …
Specialized crypto farms
Given the significant volatility of the cryptocurrency market and its unpredictability, it is virtually impossible to calculate the prospects for mining and the profitability of ASICs in 2021. Everyone can independently calculate the profitability of buying ASICs, but, in any case, it is necessary to take into account the factor that they cannot be reprogrammed to other algorithms, which can be done with mining farms on video cards. In addition, a video card can always be sold at residual value, and few people need ASIC devices. Based on this, the prospects for mining on video cards look more rosy.
Thus, the answer to the question of what the future holds for Bitcoin mining, which is entirely based on ASIC devices, seems to be quite clear. The purchase of old ASICs for Bitcoin mining can be justified only by the presence of confidence in the prospects for the growth of cryptocurrencies and the ability to wait for this event for a long time.
Given the current situation in the cryptocurrency market, the prospects for mining for the coming years are currently rather vague. But, with a high degree of probability, it can be predicted that cryptocurrencies will continue their development and will increasingly penetrate all spheres of human activity: the future calls and mines ….
This will inevitably lead to an increase in their popularity and financial attractiveness. Therefore, mining can be regarded as an investment in the future, in which cryptocurrencies, as one of the classics said, will be used not only by everyone …
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