The State Of Crypto Mining (GPU)

By Cryptopeach | Public Thoughts | 17 Dec 2022

Crypto mining has faced a major setback since ETH went to proof of stake. Every miner that was mining ETH had to switch to another mineable coin, this made the difficulty of mining any coin skyrocket, with the difficulty increasing and the price of the coins remaining the same or getting lower, almost everyone became unprofitable. Mining with any profit with a GPU can only be achieved with very low electricity prices and with the recent energy crisis almost nobody has cheap electricity.

The GPU mining market needs a coin that can absorve a lot of hashrate and stay profitable, this is not easy because for that to happen some of the existing coins have to multiply its price many times. The current bear market doesn't help, with prices getting lower and lower, mining becomes day by day more difficult. Miners switching off their rigs helps because it lowers the difficulty, but this also makes the blockchain more insecure and vulnerable.

What is happening is that everyday some proof of work coin surges to try to gain something by attracting miners, most of this coins are worthless and have no use case. Another thing that is happening is that the most profitable coins are not the widely known like ETC, ERG or RVN, the ones that are more profitable are coins that most people don't know and with that they benefit from low difficulty.

Kaspa for example is the most unknown but known coin, everyone expects big things from Kaspa and the profitability is not that bad but FPGAs are on the way which will make mining Kaspa with a GPU worthless.

The two coins that are front running every other coin right now in profitability are Radiant (RXD) and Alephium (ALPH). This coins are recent and have a very low market cap. and with that a low volume aswell. Buying and selling them is an hassle but possible. Alephium trades on which makes it easier to buy and sell, but Radiant trades only on TradeOgre and Txbit, this two exchanges are not for newbies because users actually have to look to the order book to make a trade. Both coins in the last couple days had a volume of no more than 30k USD and many times a daily trading volume much lower than that.

What are some miners doing right now?

Some miners are just mining speculatively, they are mining low volume coins with the hope that the price goes up as demand becomes higher. This is just pure gambling right now and the electricity cost piles up very quickly by doing this. It can be a very profitable bet, but people have to always expect to lose this bet.

The state of GPU mining is so critical that even CPU mining can be more profitable than GPU mining, but CPU mining also relies on speculating on low volume coins if you are not mining Monero which is not very profitable.

The conclusion is that GPU mining is in a bad place right now and nobody knows what will happen, maybe a bull market can make mining profitable again, but we still have a long way to go before that happens. Maybe in the mean time some coin gets traction and everyone can mine again from their homes with profit, we will have to wait and see. There are good proof of work projects like ERG and RVN but mining for only supporting the network is not for everybody because there are bills to pay.

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