The first half of last year was not the best time for miners. Cryptocurrencies were cheap, and besides, another halving came in the Bitcoin network , and in fact, the income from mining barely covered the costs. And the profitability of the equipment was very low, while a lot of new ASICS models appeared, which gradually began to replace GPU miners from the Ethash algorithm.
But, mining veterans were sure that these were all temporary difficulties and that a new surge in cryptocurrency prices was inevitable, which happened, as it did three years ago in the winter. Already on December 1, 2020, Ethereum broke the $600 mark for 1ETH. In early February, Ether was already worth $1,300, and on May 12, 2021, a new absolute maximum of $4,356.99 was set for one ETH coin. Almost according to the same scenario, the price of the first cryptocurrency Bitcoin has risen. The patriarch of the blockchain industry reached its peak of $64,804.72 and other cryptocurrencies rose in price and became more profitable.
Even a hacker attack in November 2020 on the Ethereum Classic network turned out to be beneficial to miners. To eliminate its consequences and prevent a recurrence of the attack, the developers had to implement a hard fork, after which ETC became available for mining even on old cards with little video memory. GPU miners have been able to expand the work of 4-gig cards on Ethereum mining , and RVN mining is making good income.
There are also two new profitable algorithms, Autolykos and Octopus. And video card manufacturers Nvidia, as if wanting to rehabilitate themselves after the release of the failed RTX 20 series, also released a new one. Miners liked the RTX 3060 / 3080 graphics adapters so much that they started putting a hash selector on the last batch so that at least part of the video adapters got to the gamers. However, according to the latest data from thematic forums, miners have already managed to solve this problem.
AMD has also released a number of promising new products. Based on all this information, we can conclude that mining is still profitable. Especially if the electricity prices in your area are not very high (or you personally have access to a free outlet). And let's try to analyze what will happen next and whether it makes sense to invest in mining from scratch in 2022.
Cryptocurrency mining prospects
Predicting the future of cryptocurrencies is a difficult task, somewhat reminiscent of guessing over coffee, but, nevertheless, there are some indicators that can be relied upon when studying the prospects for mining.
Analyzing the future of mining
When analyzing the potential future of mining, it is necessary to consider the following factors:
- The increasing difficulty of mining the most profitable cryptocurrencies;
- Are there any possibilities of increasing the capitalization and value of the major cryptocurrencies being mined during mining;
- plans of the leading manufacturers of mining equipment to produce new miners and coins;
- Legislative views related to the cryptocurrency space, which can facilitate mining and complicate the possibility of carrying out this activity;
- Suppliers plan to increase the cost of electricity, or offer discounts to miners, as people engaged in production activities. Given the fairly low cost of electricity in most countries, the prospects for mining do not look too bad.
- at what real price it will be possible to sell the equipment in the future in the event of a further decline in profitability;
- What plans do the developers of the main cryptocurrency platforms have for further development, will there be a transition to other algorithms to run the blockchain and how this will affect the profitability of miners;
- The general state of the global financial system, which greatly affects cryptocurrencies.
All of these factors affect the equipment payback period and the overall profitability of the mining business. Let's try to figure out if it is worth investing in cryptocurrency mining right now.
Potential problems for next year 2022
In the near future, it is expected that many popular cryptocurrency platforms will be updated, as well as important decisions that will affect the general state of the cryptocurrency market.
Also, the next update of Ethereum will definitely reduce the profitability of mining. And a positive decision on the ETF can significantly improve the state of the cryptocurrency market, and thus increase the profitability of mining.
And the Bitcoin exchange rate, which fell significantly in 2018, largely repeats the situation. After the spring rise came a correction and it is difficult to say how deep and long it is. And some people have already started talking about a new crypto winter, but it's too early to draw such conclusions. In addition, the ten-year history of the blockchain industry shows that after the next takedown, prices do not fall back to their old lows. It is difficult to predict when the next spike will be, but it is possible. If this happens again, the cryptocurrency mining business is likely to become more profitable.
Is it worth it to start mining in 2022, and how not to lose money
The decision on whether to start mining this year should be taken taking into account the factors affecting the cryptocurrency market and the financial opportunities available. Given the unpredictability of the exchange rate in the long run, you should not take out loans for such a business.
The most logical decision to invest in mining would be to allocate an amount that is not important in the short term and implement mining in the long term or to trade on exchanges.
Mining 2022 - the essence of the process and prospects
In 2022, the most profitable cryptocurrencies for mining, according to Whattomine data (assuming a seven-day mining period), are:
- for AMD cards: Ethereum (for cards with 6 GB memory and above, until they convert to PoS), ETC, Ravencoin, Ergo, Beam;
- For Nvidia cards: Ethereum (for cards with 6GB of memory and above, until they convert to PoS), Ergo, Conflux, MTP, Equilibria, BitTubeCash and other forks of CryptoNight, MimbleWimble and Equihash.
And all these coins give a profit of about 100%, so it can not be said that mining is not profitable now. Most of these coins are constantly present in the best cryptocurrencies used for mining, so you can plan because such a business will constantly generate income.
Business development plan, what you need to know when investing money
When calculating a business plan for the development of a mining business, it is worth considering the factors indicated above, which cryptocurrencies will be the mains for mining and deal with their prospects in more detail, including the complexity of mining.
- Just some technical details
When mining any cryptocurrency that is mined using the Proof of Work (PoW) algorithm, it is necessary to take into account the complexity of mining. This indicator is associated with an increasing increase in the power of the network and algorithms for running block chains of different cryptocurrencies, since the time of block creation should be approximately the same.
- mining difficulty
When the profitability of the coin increases, many miners “jump” to it, hoping to get a big profit. Often they do not win anything at the same time due to the fact that while they are mining enough coins to exchange, their price will go down.
You can insure against this when using Nicehash , but you need to be prepared to pay a commission and use less than optimal graphics card settings to achieve compatibility with most mining algorithms.
As a rule, in the long run, miners receive less income than mining common coins due to the increase in network complexity. This factor must be taken into account when calculating the profit from a mining farm in the long run. There are many resources on the Internet that allow you to study the difficulty graph for each specific cryptocurrency, and understand approximately how profitability is reduced.
Let's try to develop a mining business plan with the calculation of the cost of the farm and taking into account its recovery.
Minimum investment in mining
The minimum investment amount in commercial mining is related to the following factors:
- The cost of a mining farm , which can consist of one machine for 6 cards of the level GTX 1660Super or RX 5600 XT, or, on a large scale, will be almost twice the cost of one machine with these video cards, or other components;
- the cost of rent and security, which is different in each case, for example, for hotel mining, you need to plan a periodic payment, and in the case of using the house, the rent is zero;
- the cost of electricity per month, which is desirable to take into account when starting a mining business, because it is better to exchange cryptocurrencies for money without rushing;
- The cost of paying for Internet access.
When calculating a mining farm, you can take the cost of one drilling rig as a basis, and as a conventional unit used in mining . A typical drilling rig may have this configuration:
- MSI Z390-A Pro motherboard - about $125;
- processor for socket 1151 - about $125;
- 4 GB DDR 4 RAM - About $30
- a power supply unit of at least 1200 watts or two of 700 watts each with a bronze certificate and above - from $ 100;
- 6 GTX 1660 6 GB or 6 AMD RX 5600|5700 XT with 6/8 GB of memory with six risers - $5,500 and up;
- Case/frame, cables, wires, surge protector - about $50.
Also, the total cost of such a device will be about $ 6000. And you can save somewhere, buy somewhere better equipment. But the order of prices for a new rig would be something like this.
Taking into account the current profitability of mining Ethereum and other similar cryptocurrencies, according to Whattomine, the daily income from such a business will be around $8 at an electricity cost of 6 US cents per kilowatt. Based on this data, the mining farm will bear fruit in about 25 months.
A lot or a little, everyone decides for himself. When planning investments in cryptocurrency mining, fluctuations in its growth must be taken into account. As of 06/26/2021 11:20 GMT, the exchange rate of Ether on the Binance exchange is $1,727 per coin. After upgrading the network and improving the technical characteristics of the Ethereum platform, it could rise again to $4,000/5000 and more.
There are many factors that allow us to hope for further growth of cryptocurrencies, which will make the payback period much shorter, but no one can know for sure.
Importance of mining on Asics in 2022
If you calculate the farm using ASIC equipment, you need to take into account that the profitability of old ASICs is now very low, and the new farm is likely to be profitable only in the next few months.
And 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 coding farms
Given the high volatility and unpredictability of the cryptocurrency market, it is almost impossible to calculate the prospects for mining and profitability of ASICs in 2022. Everyone can calculate the profitability of buying ASICs independently, but, in any case, it is necessary to take into account the fact that they cannot be reprogrammed. To other algorithms, which can be done using mining farms on video cards. In addition, the video card can always be sold at residual value, and few people need ASIC hardware.
Accordingly, the prospects for mining on video cards look more rosy. However, all PoW algorithms are taken under the control of industrial miners, and some blockchain projects (for example, the same Monero), which protect themselves from ASICs, are turning into algorithms that are useful only for mining on central processors.
On the other hand, there is more and more hype about excessively high electricity consumption from bitcoin miners. The Chinese authorities are already planning to ban the operation of crypto-mining data centers in one province where electricity is produced mainly in coal-fired plants. Elon Musk's tweets about "non-environmental" mining of bitcoin also contributed to the devaluation of the first cryptocurrency, and later the rest.
Thus, the answer to the question of what the future holds for Bitcoin mining, which is entirely based on ASIC hardware, seems quite straightforward. Buying old ASICs for bitcoin mining can only be justified by having confidence in the cryptocurrency’s growth prospects and the ability to wait for this event for a long time.
And the most important problem is not the bad impact of mining on the environment, but the upcoming transition of the financial systems of developed countries to the blockchain. The United States and the European Union are also closely monitoring China's digital currency transformation program and are almost ready to launch such projects. Other governments are following suit. Now they are already starting to perceive Bitcoin and other distributed network cryptocurrencies as a direct threat to the state's monopoly on the issuance of funds. A direct ban has yet to be reached anywhere, but pressure is growing. And in poor countries, for example, in El Salvador, Bitcoin is already ready to be recognized as an official means of payment. Some issue state-owned cryptocurrency, while others, who do not have the money to develop it, are willing to use what they have.
Given the current situation in the cryptocurrency market, the prospects for mining for the coming years are still somewhat ambiguous. But, with a high degree of probability, it can be predicted that cryptocurrencies will continue to develop and will increasingly penetrate into all areas of human activity: the future is calling and mining....
This will inevitably lead to an increase in its popularity and financial attractiveness. Therefore, mining can be considered an investment in the future, where, as one classic said, not everyone will use only cryptocurrencies ...
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