Mining farm in 2020. Is it profitable?Endy Callahan
In 2017-2018, mining was at the peak of its popularity. For some time it was considered to be one of the most profitable businesses. Technology helped to verify the transactions and thus support the performance of crypto-currency platforms. However, with the collapse of the value of coins, the profitability of their production fell sharply. Will mining be profitable in 2020?
Prospects for mining in the nearest future
Many people do not believe in the profitability of "farms" for the crypto mining. Of course, large associations of equipment are more profitable than private individual miners. When planning activities in this direction, determining the factors affecting business efficiency is more than useful:
- Competition. As the network power increases, the reward of each miner decreases. Therefore, high profits from cryptocurrency mining obviously attract more people willing to participate. As a result, the reward for each unit of equipment used gets lower.
- Technology development. Constantly there are more and more new machines that are specially designed for mining. Therefore, it makes no sense to buy old equipment that is barely profitable.
- The cost of cryptocurrencies. A decrease in the total reward has posed a question about mining profitability. Sometimes it is cheaper to just buy cryptocurrency than to spend money on electricity and wear out equipment.
- Government restrictions. In a number of countries, cryptographic currencies are not recognized as a means of payment, this has a negative impact on the development of the market.
You can learn about the possible cost of BTC from the article "Bitcoin forecast for 2020". We recommend to read it.
Features of mining in 2020
Many consider cryptocurrency mining as passive income. It is a highly attractive tool for making money. In order to make your business profitable, you need to use only high-performance farms. The key problems that make cryptocurrency mining unprofitable are the following:
- The remuneration decrease. After a certain period of time, the reward for each subsequent block is reduced.
- The cost of electricity. Energy consumption increases along with the performance of cryptocurrency mining equipment. In addition, video cards physically wear out during operation.
- The complexity of hashing. 10 conventional pieces of equipment were enough to stably mine bitcoin digital coins. As of now, it has increased to 12 units.
- Cryptocurrency price. The coin price decrease makes its production less profitable.
Most likely, we should not expect a sharp increase in earnings from mining in 2020. There are more and more suggestions that Ethereum will switch to the PoS algorithm, there are more and more coins that do not require mining. Of course, we cannot be 100 percent sure. In addition, manufacturers of ASICs and other cryptographic equipment have already accustomed to the fact that the complexity of mining coins can increase dramatically, although the reward will be decreased.
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