Why is the coin price too high and the mining cost too high (why are mining profits getting lower and lower)
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Why is the coin price too high? Mining costs are also high. Bitcoin prices have dropped by 40% from their peak in November 2017 and have not moved for three months now
In recent years, with the continuous development of the Cryptocurrency market and the collapse of the price of mainstream currencies, the difficulty of mining has gradually increased. Why is the coin price too high and the mining cost too high? Because many investors invest their funds in mining projects, but mining profits are not stable In the coin circle industry, mining is a very risky job, so many people will search for new profit opportunities. But in reality, mining to make money is not an easy task, but requires taking on certain risks. For example, digging a coin requires paying as much electricity as it costs to ensure revenue; If it is a one-time payment of 100 yuan, then it is 200 million yuan. If you sell out the mining equipment that earns 1 or 5 yuan a day, it may result in a loss of your principal! And to avoid such situations, we often find that the bill dug up does not actually belong to the personal interests of the investors. Therefore, if you can receive returns and receive generous returns (i.e. you have to pay at least 1000 yuan per year) and cannot afford any significant losses, then you will face very serious financial difficulties The most common practice on the market at present is to mine Bitcoin primarily or use other assets as support for trading, buying, and selling on the Bitcoin network. The process is quite cumbersome, and some exchanges even require users to store digital tokens in a location before they can use them for trading. For ordinary investors, holding a small portion of Bitcoin allows them to make daily purchases and maintain these services, as well as engage in various complex investment activities and related derivative products anytime and anywhere However, as mining itself is a big business, people generally do not buy stocks, bonds, and other securities like they do in stock trading. Instead, they hold their own cash in their hands and use the money they think is suitable to purchase certain types of products/goods and services. This way, even if the market situation deteriorates, there is no need to worry, after all, the current price of Bitcoin is still quite expensive, and even if it continues to rise, it can maintain a high yield. (Wu said blockchain)
Another argument is that the requirements for GPU chips are realized through ASIC chips, so that after the GPU reaches a higher level of performance, a large number of machines are added to the system to process computing tasks, which can make it more flexible and efficient, so that the operating speed of the entire system can be increased many times, reducing hardware resource consumption, and ultimately creating a better Proof of work mechanism, This provides more opportunities for people to participate in mining. Of course, there are also a few companies that adopt similar methods to reduce electricity costs. In addition, some companies may also consider choosing solutions specifically designed for high-performance chips to support the production and installation of mining machines. However, this approach may bring huge economic problems to miners: on the one hand, there are many inefficient and high power consuming ASICs in the current market.
Why mining profits are getting lower and lower
Editor’s note: This article is from BlockBeats (ID: 0x29), author 0xc9a8, reprinted by the Daily Planet with authorization What is the reason why Bitcoin’s mining revenue is decreasing? In the past year, with the impact of the global economic slowdown and China’s crackdown on bitcoin mining, the prices of some Cryptocurrency have declined. 1. The halving of Bitcoin has affected the price increase, and the current transaction cost of Bitcoin is $1 per coin; 2. Because the COVID-19 epidemic has caused serious damage and pressure on global economic growth, many people believe that BTC may continue to decline, but they still hold on to it. Due to the continuous rise in coin prices, miners are looking for the next opportunity to reduce their risks. 4. It’s time to sell BTC instead of buying more tokens. 5. Why has the mining revenue decreased and the yield is also rising? The total income of miners on the Ethereum network has dropped to about half in 2020. In recent months, miners’ profits have also shown significant growth, with an average daily profit of approximately $2 million in the first four months of this year. This has led to significant challenges to the profitability of the mining industry, even more difficult than before. 7. After the surge in computing power of Bitcoin, it will face greater problems. When the market situation plummets, Bitcoin will undergo significant adjustments. 8. Bitcoin mining equipment is forced to shut down, which means that future mining operations may become extremely difficult. Therefore, if investors choose to withdraw from mining operations, they are likely to lose a large amount of funds.
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