Cryptocurrency mining in 2019, an overview of the current situation and optimal options

This fall, the power of the Bitcoin mining network updated its next highs, breaking 108 EH / s. The hashrate of the network depends on the fluctuations in the cryptocurrency market, miners turn on the equipment when the value of the digital currency reaches those values at which mining pays for their energy costs.

The relatively smooth dynamics of the network capacity with significant fluctuations in the exchange rate shows the stability of mining as a business in a crisis period and is a less risky investment tool than direct purchase of cryptocurrencies .

The most optimal cryptocurrency mining option for the vast majority of people is still cloud mining , since it does not require buying, setting up and maintaining the operation of equipment. At the same time, cloud service tariffs are more profitable than buying a small batch of your own equipment (up to $ 100,000). See the current rating of reliable cloud mining services here .

With the growth of the hash of the network, the maturity of mining as a business also grows. Bitfury's own analytical data using open data from the Bitcoin network and mining pools show that mining goes to large players, 80% of the network’s power is provided by farms from 100 kWh, and 60% from 1 MWh. At the same time, “home” miners from Chinese manufacturers remain the most popular equipment. Such devices are small in size and consist of standard 1-3 kW / h standard computer power supplies that are convenient for frequent maintenance. In addition, there has been a tendency to combine all the components of the miner into a monoblock case, which has an extremely low cost due to the maximum cost reduction of the components.

Every year there is a growing interest in professional equipment, which is designed for a longer trouble-free operation, thanks to professional telecommunication power supplies. They receive great support from regulators in European and Western countries. Until recently, such mining equipment was available only for large corporate sales, but not for small and medium-sized businesses. However, today manufacturers, including Bitfury, are striving to expand their global customer base and simplify the purchase process by opening online sales for all categories of entrepreneurs.

Today, there is a trend towards greater openness to the mining industry. Thus, the Cambridge Institute interacts with miners and equipment manufacturers, issuing regular reports on the state of affairs in the industry.

Technical specifications and performance of mining equipment are growing, but the rate of increase in efficiency has significantly decreased. A few years ago, the transition to a new technological process (from 55 nanometers to 28 nanometers and then to 16 nanometers) meant a multiple increase in efficiency per unit of power. Now, new generations of chips rarely provide more than 20% growth at often high cost.

At the same time, the development of ASIC chips for mining has reached the technological level of “standard” microelectronics. We no longer catch up with technological progress at cosmic speed, but move with it. Often, the mining industry, which has grown almost from underground, due to huge volumes of production (hundreds of millions of chips) and engineering talent, affects other technologies. Critical to mining, the low-voltage chip design finds its application in AI and high-performance computing (HPC). More than 100 MWh of mining capacities based on Bitfury immersion cooling are the largest testing ground for this technology.

With a slowdown in equipment improvement, market participants are looking for other ways to optimize their business. So, many companies are developing their own alternative firmware for equipment that allows you to overclock mining (with high mining margins at the moment), or vice versa – convert to Eco-mode (for maximum energy efficiency). For example, Bitfury provides hardware configuration changes for these purposes. Mining service providers are also optimizing the cryptocurrency mining process through the deep integration of software devices, data center management systems, mining pools and crypto exchanges .

The decisive factor for success is the ability to find an electricity supplier who can offer a cheap resource and conclude a long-term contract with it. Today, profitable mining is possible at an energy cost of $ 0.05− $ 0.06 cents per kWh, and taking into account the need to return investments – no more than $ 0.03. Cryptocurrency mining is becoming an increasingly understandable investment tool. Over the past year, investor expectations for returns have fallen by 15%, and people are ready for a long period of return on their investments.

A hot topic for the mining industry is the upcoming Bitcoin network halving , which will happen in May 2020. The previous two halving were quite successful, the price of BTC increased significantly on the eve of the reduction of the mining premium by half, while maintaining the yield in fiat equivalent. Since then, the industry has matured significantly, and experts are very careful in their forecasts of the upcoming halving. Perhaps this time, the key factor to overcome this milestone will not be new equipment, but access to cheap electricity and the ability to optimize operating costs.

Therefore, now the best decision will be to buy a contract in the cloud mining service for 1 year , and when this contract expires, you will need to analyze the situation with the hashrate and the complexity of the network that will be at that time.

Publication date 10/22/2019
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