March 12, 2021 (Investorideas.com Newswire) Since the inception of cryptocurrency, people have used mining to acquire cryptocurrencies. Be it Bitcoin, Ethereum, or Litecoin, mining has been a conventional method used by the majority of traders.
The mining process is based on the proof of work system. The miners use their analytical skills to solve puzzles that are cryptographically challenging to solve. Upon the solution, the miners are rewarded with a share of the cryptocurrency in return for the solutions.
Mining is losing its Charm
However, the mundane method of acquiring cryptocurrencies such as mining has lost its fan base. People around the world prefer automated Bitcoin trading platforms like Bitcoin Equaliser. As these applications require less intellect and are fast in profit returns.
This has led to the downfall of the mining industry where people are moving away from mining to trading off cryptocurrency since it does not require the same level of intellect, equipment, and running costs such as mining. People can register into automated trading apps with as low as $250 and start earning without the hassle of setting up a system for mining Ethereum or Bitcoin.
Despite the increased running costs of mining, the profits are reducing every year. In 2017 if a miner would earn a sum of $150 from one rig while mining Ethereum, now the same rig is earning almost a quarter of that sum which is highly disappointing because the expertise involved in mining have remained the same or in some cases require more effort due to saturation.
Another reason for reducing profits is the price of the Ethereum coin itself. Since 2017, the price of the Ethereum coin has constantly been volatile. Therefore, people are unable to determine the cost of the coin over the course of a month hence unable to plan their mining.
Even when the price of the Ethereum went up in early 2020, the difficulty of mining the Ethereum coin also went up. Due to this reason, the average of a computer to solve the mathematical questions has reduced enormously. The same computer that generally mined up to ten coins a day, has reduced to a mere two coins.
Saturation of the Market
Similarly, the mining and trading industry has been saturated for a few years. When an increased number of miners are mining at the same time. It increases the difficulty of the problems that need to be solved to acquire the coins.
Mining in Groups
However, mining of Ethereum in groups or with corporations is profitable in 2021. To get out of this low-profit rut, cryptocurrency geeks have started to relocate their mines in countries with lower electricity costs so that they can proceed with less running costs to increase profit.
This indicates that the mining of Ethereum is still profitable to some extent in 2021, but the strategy and the statistics have changed enormously. Miners need to plan their expenses efficiently to increase their profits.
In addition to this, the profits from mining depend on the market situation. If the stocks are going up and the market is not saturated enough – miners can take advantage of the situation and mine continuously to acquire a larger fraction of coins and then stop mining once the situation is not in their favor and opt for other methods such as trading and lending of bitcoins.
Ethereum mining has been profitable for minors around the world, but due to the increase in the market saturation and complexity of the problems that ought to be solved to gain coins. The mining process has become difficult and costly.
However, with better planning and spaced-out mining considering the market situation, miners can still gain huge profits. As time passes, miners with better strategies will earn more and those who are lazy with their planning will have to face losses.
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