In 2011 when I first heard about bitcoin and cryptocurrency mining I laughed, now I regret not having started in that world back then. A couple of years ago when I decided to invest in mining the prices were already prohibitive and the crypto market seemed too volatile to risk so much money. In fact, back then in my country the price of electricity made it not a profitable business.
However, in some places it was a profitable business. Big and small investors started to hoard the most profitable gpus and the graphics card market went up in price. So much so that you had returns on investment of several years. Something that not everyone can afford.
Now the situation has changed and has taken a 180 degree turn. In the last year or two, the price of graphics cards has fallen by up to 50%. Those investors who bet heavily on cryptocurrency mining are getting rid of their equipment. It's time to ask ourselves, should we buy? Following the saying "Buy in the dip" yes. But we must first analyze the causes because it may no longer be such a profitable investment.
When a market drops abruptly in price there is usually a reason or several reasons behind it and this is the case of the mining equipment market. For some time now, there has been talk of the move from ethereum to ethereum 2.0. And this entails two main consequences: the mining of this cryptocurrency (one of the most stable in the ecosystem) is eliminated and the improvement in the processing speed per block from 20 blocks per second to 100,000 as promised by the ethereum guys.
If this is true, all other cryptocurrencies that do not adopt a similar system will be outdated in a short time since the Ethereum 2.0 network will be way ahead in terms of technical quality and performance.
The end of mining in this network will be due to the change of protocol from "Proof of work" (PoW) to "Proof of Stake" (PoS). Broadly speaking, it could be said that we are going from validating transactions through the mathematical calculations of the graphic cards in the mining equipment to doing so through transactions by consensus according to staking (I myself do not understand very well what staking has to do with validating a transaction).
The consequences in the mining market is that if this is true and functional, one of the heavyweights of this market will fall and will gradually engulf the other cryptocurrencies as they join similar processing models.
That is why, although graphics cards and mining equipment may seem like a good investment right now because of the price, perhaps they are not so good considering the outlook that may await us. Even so Ethereum 2.0 has not yet been implemented nor do we know what will happen in the future. I recommend that if you plan to invest in mining take good care of the Roi (return on investment) and keep an eye on market news in this regard. At the moment I have not heard that any other network intends to do the same as Ethereum in a serious way. But perhaps others do.
Also i want to say that this is my opinion as i see the market and the news right now, i cuold be wrong.
