When Cryptocurrency Mining Will End?

Can Mining Cryptocurrency be Profitable?

by DailyCryptoInfo 147 Views

When Cryptocurrency Mining Will End?

Can Mining Cryptocurrency be Profitable?

by DailyCryptoInfo 147 Views

It will end when all the processing power in the world has been drained due to mining as much cryptocurrency as possible.

We’ll literally have caved in, but with virtual currency.

Much has changed for Bitcoin, cryptocurrency and blockchain since the last Bitcoin halving (something the community calls a halvening), which happened July 9, 2016, and each time it happens no one is entirely sure how the Bitcoin price, or the economy that has built up around it, will react.

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A Bitcoin halvening — there have been two since Bitcoin's creation in 2009 — is a fixed event and will occur after every 210,000 blocks are mined, or confirmed, by the system.

Some 12 months after the first Bitcoin halving event in November 2012, the Bitcoin price reached what was then an all-time high of $1,000.

The 2016 halvening heralded last year's bull run which peaked in December 2017 with the Bitcoin price reaching an eye-watering $19,000.

Since then it's fallen sharply back — but the same happened after the 2012 halvening and subsequent boom, with the Bitcoin price falling as low as $200 per coin before picking up in the lead up to the 2016 halvening.

History of mining

Before Bitcoin became the largest and most valued coin in the cryptocurrency world, it was just another digital product of interest only to a few geeks and crypto fans. They discussed Bitcoin on forums and chat rooms talking about implementing tougher security, ensuring anonymity, and mining. Following Nakamoto’s suit, many of those early users started mining Bitcoin as well. There was nothing else to do. Bitcoin had no tradable value and nobody had tried using it for payments. But as its popularity increased along with its value, dedicated miners were attracted to the lucrative mining business. Those newcomers had powerful computers with specialized hardware that could process the complex mathematical puzzles fairly quickly.

Because those professional miners were authenticating more transactions and earning more Bitcoins every day, the Bitcoin developers decided to increase the complexity of the mathematical problems. This practice got picked up by other altcoins such as Ethereum and Monero. Increasing the difficulty of verifying the transaction is meant to keep the field of cryptomining both competitive and stable. But it also means that more powerful rigs and more energy are required if a miner wants to stay profitable.

Scientists have found it hard to gain access to graphics processing by the lack of GPUs available. Graphical processing is a key aspect of running experiments to expand scientific knowledge.

In addition, the increase in GPU prices rightfully made many computer enthusiasts to have an adverse reception to the mining of cryptocurrencies. However, with recent announcements concerning ASICs and the changes Nvidia are going to make, prices for GPUs should soon return to more manageable levels.

Mining through proof-of-work algorithms is still an important part of the many cryptocurrency networks and provides blockchains with their biggest source of security and immutability. A loss of mining power would certainly have a negative impact on the cryptocurrency sector.

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Ethereum mining in the balance

Remember, easier transaction authentication requirements translate into cheaper energy bills to pay at the end of the month, which translates into higher profit margins even if the coin you were mining didn’t have that much value. The influx of the new eager and better-equipped miners to the Ethereum world alerted the developers that they needed to do something about it. The next thing you know, the hash was doubled thus increasing the difficulty of mining.

And it’s not just Ethereum. This same pattern is the norm across the altcoin world. As soon as the network reaches its maximum of new coins per set number of minutes, the system adds new algorithms to increase the calculations needed to solve the puzzle and win the reward.

How profitable is Bitcoin mining

For one thing, those monstrous computers use up a lot of electricity. So when the price of Bitcoin drops to a certain rate, many miners just turn off their machines, much like a motorist killing the engine at a traffic stop, and wait for the rates to go up again. Since the peak of late last year, miners’ profits have dropped by half, thanks to the growing competition, increased hash rate, and the drop in Bitcoin value.
This new situation has made it rather difficult for many miners to stay in the game. Between the cut-throat competition and the increasing cost of creating a Bitcoin or even a fraction of it, miners were learning about the downside of the free market the hard way.

The cryptocurrency mining industry has seen significant changes through increases in miner counts and subsequent decreases in mining profitability over recent months.

The latest cryptocurrency price boom attracted a large number of new investors and exponentially increased the difficulty of many mining algorithms. Additionally, many ASIC manufacturers announced plans for new mining machines, which will disrupt the GPU mining industry.

See also: Which Cryptocurrency Mining Is Best?

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