Uncertain outlook by Joël Valenzuela, Dash Coin
The bear market appears to have hit hard on crypto mining with major outfits opting to venture into other lucrative ventures. For instance, Bitmain future appears to be unclear. The recent action by the mining giant to suspend its operations in Texas is a clear indication where mining is headed in the near future.
The hype that came with cryptos saw mining take root but ten years down the road, the hype is creeping out of the market with more mining firms finding it less lucrative and mining equipment too expensive to run. In an interview hours ago with the Public Outreach Officer at Dash (DASH) and the DashpayNews editor Joël Valenzuela told Newconomy that:
Why Crypto Mining
Crypto mining is a way of generating new coins on as opposed to buying them. The process is facilitated by a peer-to-peer computer network to makes it easy to use the combined computing power. The more decentralized the outfit, the faster the mining process becomes and this lowers the transaction cost and confirmation times.
To this end, Joël adds that many mining firms were enticed by the huge margins which have been dropping as coins get minted and the rewards dwindling. He adds:
The Future of Crypto Mining
According to Joël, cryptocurrency mining is labor intensive:
“Mining consumes a lot of power and the rewards do cover the cost. Mining firms are looking for locations where electricity is cheap and the cost of buying the mining equipment is low.”
With lower mining returns, many firms have gone under and the trend is set to escalate in the near future. Giga Watt recently filed for bankruptcy and shut down its operations. This is among the top five mining companies that have been pushed off the business and more are to follow.
In related news, chip making company, Taiwan Semiconductor Manufacturing (TSMC) has reported a significant drop in its mining revenues by close of 2018. The diminishing returns on mining are driving major players in the industry.
It is clear that mining as a business is not as lucrative as it used to be 6 years ago and the migration by miners to shinier coins will not sustain the business. However, with cost-effective and efficient mining equipment, there is still hope in the mining business.
You can check our closed part of this content in our Newconomy Club with the 5 steps to make your crypto mining profitable.