With Bitcoin’s price back above USD 8,000 that still doesn’t promise a bright future for the cottage industry of miners. Miners use GPU‘s or ASIC‘s to solve an algorithm and contribute to the verification of transactions on the network. A reward is issued in the form of digital currency for the hashing power they have supplied. If Bitcoin was to re-visit these prices again for extended periods we could see the industrial-scale mining operations take a tighter grip on the market. With smaller mining solutions rendered unprofitable, this could lead to centralization of the system moving away from the ethos of cryptocurrencies.
Mining verging on unprofitable
Using whattomine.com and a single 1080 ti as a reference Hush(HUSH) Equihash was the most profitable at the time. Over a 24 hour period, it was estimated you could generate anything around USD 2.46 revenue which compared with earlier this year you could have been earning in excess of 3 times more.
If you were to take on average the cost of electric to be USD 0.12 kWh that would reduce profit to USD 1.91.
If you were lucky enough to purchase before the price hike seeing the 1080ti soar way past USD 1000, it would still equate to at least USD 2.49 per day if you were aiming to pay the card off over a year. Whereas earlier this year, GPU’s were taking anything from 6 to sometimes as little as 3 months to hit ROI. This is an oversimplification of the expenditures associated with mining but the figures aren’t positive.
According to Lucas Nuzzi, miners hold between 20 percent and 30 percent of all bitcoins. With reduced profitability miners are forced to sell more, boosting availability, and further depressing bitcoin’s price.
It’s important for the crypto community to continue to support the ethos of decentralization. Hopefully, developers will continue to support this by building in resistance to ASIC’s or forking currencies. In the technologies infancy with little regulation, we may have to hold on and stay strong.