As the top digital asset Bitcoin (BTC) reportedly fell through its break-even cost of mining for the third time in recent months, the economics
of the Proof of Work (PoW) consensus algorithm has been questioned by a number of wary skeptics. For example, in an op-ed content that became a hot topic in the industry in a matter of minutes, a certain MarketWatch contributor declared that Bitcoin (BTC), with its drought, was poised to enter a death spiral considering the bearish market sentiment that has crippled the space this year. The piece, once lauded by
many cryptocurrency enthusiasts, has since been debunked. Unsurprisingly, this
flagship asset has not crumbled to dust as claimed initially. Yet, many like to quip
about digital token mining. Recently, a number
of industry experts have targeted Ethereum (ETH). So after Bitcoin (BTC)
was put on the spotlight, it is safe to
say this is Ethereum’s (ETH) turn. Ethereum (ETH) Price Today – ETH / USD
Ethereum (ETH) Mining Remains Profitable
Citing data collected by crypto friendly quantitative
trading group Susquehanna, small-scale mining operations are not feasible.
According to the report by the Pennsylvania-based firm, the average Ethereum
(ETH) graphics card-powered miner saw monthly profits dwindle from the $150
recorded in May 2017. According to
Christopher Rolland with Susquehanna with Nvidia’s flagship processor (GPU),
the return-on-investment and the GTX 1080, provided was dismal. Hence, it is
logical to the present profitability trajectories, most miners even miners who
want to accumulate ETH may start flunking out of block processing. However, in an exposé piece via DeCrypt Media, Tim Copeland,
debunked the data provided by Susquehanna,
claiming that “Ether miners are running strong.” Peter Statsenko, a journalist
with Deutsche, told Copeland that the cost of electricity required to achieve
break-even Ethereum mining is $0.15 per KWH. With kilowatt-hour rates remaining
below this figure in several countries, namely Venezuela, Canada and China,
there are likely a large number of miners who continue to ensure their rigs are
Mining Far From Profitable in Areas With High Electricity
It is important to
indicate that in a majority of the
countries where cheap electricity is scarce, mining cannot be financially
advantageous. OVOEnergy gave a report
that Japan’s average electricity rate is now above the $0.26 per KWH mark which
is far beyond the level that miners can work with.
Interestingly, the hashrate statistics of
the Ethereum Network have reflected on
the flunking of several retail miners. The figure has dropped by 33% since
Bitcoin began its recent leg lower last month.
Constantinople May Yet Chase Crypto Miners
Prospects may appear overly dismal for the backbone of Ether, but commentators and analysts in the space have indicated that the onslaught is not close to being over. In a sequence of tweets recently breaking down the topic from top-down, one crypto-friendly market analyst, Alex Kruger, explained that miners left standing are not in the clear. As per Kruger’s analysis, miners who are paying $0.06 per KWH in electricity bills will have a mining “operational break-even to the tune of $67,” and currently $35 (-35%) which is even below the current market value of Ether.
Princess Ogono is a writer, lawyer and fitness enthusiast. She believes cryptocurrencies are the future. When she's not writing, she spends time with her adorable cat, Ginger and works out often.