Why is mining getting less and less valuable (Why is mining valuable)
Why is mining getting less and less valuable Editor\’s Note: This article is from
Why is mining getting less and less valuable Editor’s Note: This article is from the blockchain ID: hellobtc, author: a poplar tree, authorized reproduction of Odaily Star Daily.
As more and more people in the currency circle recognize the value and scarcity of Bitcoin mining, and more and more investors join the industry of mining for investment, the price of Bitcoin has soared three times or even more in a short period of time. In a sense, the reason behind the rise in Bitcoin price is the continuous increase in computing power in the Bitcoin network.
So the question is, why is mining getting less and less? The answer is simple. Why is mining faster and more expensive than any other industry? Bitcoin mining difficulty needs to be halved or algorithm adjusted every 10 minutes, so mining income is as expensive as any other industry. But due to the limited and difficult-to-maintain network capacity of Bitcoin, many cryptocurrency projects adopt a “double spending” mechanism. In order to ensure system security and avoid losses caused by excessive block rewards, mining can change the proof of work consensus mechanism to proof of stake. This change is also called “hash function”, which optimizes computational power to improve efficiency and reduce energy consumption; at the same time, select hardware devices such as notebooks or CPUs that suit your needs to provide better storage space. So if a system wants to get more resources, it can use some new ASIC chips for mining, which can save electricity and ensure the security of the entire process. Of course, GPUs and other integrated circuits can also be used to process transactions, as these devices are usually specifically designed for calculation purposes and have very low power consumption. However, the current situation is quite the opposite.
In recent years, the world has been competing for the position of Bitcoin as the world’s reserve asset. In January 2020, the US government announced plans to ban Bitcoin as a payment method. Although this policy did not bring any actual benefits to Bitcoin, it is not the same for China. “China is becoming the world’s first country to allow people to sell their own digital gold directly to foreign users.” According to CoinDesk, the Chinese central bank has purchased more than 400 million US dollars of paper coins this year in order to issue virtual legal deposits within its territory. This news has attracted attention from the industry, and the most famous of which is an article published by Indian Finance Minister Larry Sabo, “How to use the new crown virus epidemic to promote economic recovery.” The article said at the time: “Although it is not yet known which factors have caused the failure of Bitcoin mining business,” But I think this is mainly because China’s infrastructure is insufficient”. In fact, many countries’ banking institutions have not considered entering the Bitcoin field, but regard it as a potential new form of economic activity rather than an emerging technology, such as central bank issuing CBDC, or central bank launching CBDC may help alleviate the tension in the domestic financial market. On the other hand, China’s electronic information manufacturing industry still faces huge production difficulties, especially in industrial manufacturing, and companies cannot meet the needs of the development of the real economy.
Why is mining valuable
Why is mining valuable? The value and investment of Bitcoin are irrelevant.
Because mining makes money, many people are asking this question. But if we attribute the investment income of these years to one factor: it is the money you earned; in addition, if you have no experience of speculating in the coin circle (such as the bull market in 2017), then your investment will be a big loss!
In fact, both of these reasons are related to “mining”:
1. Mining is a high-risk process.
2. When someone starts to participate in it, they need to invest a lot of money to mine their cryptocurrencies.
3. Investors obtain rewards by purchasing mining equipment and holding the tokens of that person as a return. This method can help improve the company’s profit margin and increase sources of income, and so on.
4. Since most people are novices, it is difficult for ordinary people to get in touch with mining.
5. Mining costs are high and relatively expensive for individuals. For some old companies, “mining” may be more easily eliminated.
6. In general, “mining” is not suitable for financial business, but directly enters other industries or companies engaged in related work. “Mining”, that is, the so-called application of blockchain technology.
7. The reason why mining is worth investing mainly lies in the large amount of resources and manpower consumed in the mining process.
8. Currently, many projects in the market have dedicated hardware for mining, such as Antminer S9 and other products that will be listed after running for a period of time. But many companies are unwilling to spend so much time on chip R&D, so they decide to give up developing new models and do their own ASIC mining machine business.
This article and pictures are from the Internet and do not represent qiAiAi's position. If you infringe, please contact us to delete:https://www.qiaiai.com/metaverse/24496.html
It is strongly recommended that you study, review, analyze and verify the content independently, use the relevant data and content carefully, and bear all risks arising therefrom.
Related recommendations
-
What is cryptocurrency arbitrage (Can you still make money with cryptocurrency arbitrage)?
What is cryptocurrency arbitrage? How does it work? We can break down cryptocur
-
FiNANCiE and Marui Group Partner to Support Creator Economy
According to reports, FiNANCiE, a blockchain token issuance crowdfunding service platform, announced the completion of a new round of financing, with retail and financial company M
-
#Market Update: Shanghai Composite Index and Shenzhen Composite Index fluctuate as Blockchain and Digital Currency Sectors Witness a Downturn
According to news, the A-share market closed at 3264.1 points on the Shanghai Composite Index, which fell 0.02%. The Shenzhen Composite Index closed at 11185.68 points, which rose
-
North Koreans supporting Lazarus Group sanctioned by US Treasury’s sanctions regulatory agency
According to reports, the sanctions regulatory agency of the US Treasury Department has banned three North Koreans who support Lazarus Group, a North Korean hacker team known for s
-
Ethereum NFT Layer 2 Expansion Plan Immutable X Announces IMX Utility Upgrades
According to official news, Ethereum NFT Layer 2 expansion plan Immutable X announced two IMX utility upgrades: 20% of the platform fee must be paid in IMX; IMX will become a nativ
-
Apple Removes Bitcoin White Paper from macOS Ventura 13.4 Beta 3 Update: What You Need to Know
According to reports, Apple released an update to macOS Ventura 13.4 Beta 3 for developers today. Foreign technology media 9to5Mac found that Apple has removed the hidden Bitcoin w
-
CNHC Group Raises 10 Million USD in Financing Round
According to reports, the stable currency issuer CNHC Group completed a US $10 million A+round of financing. KuCoin Ventures led the investment, with other investors including Circle and IDG Capital. According to CNHC co founder Joy Cham, it is currently issued on the Ethereum and Conflux blockchains, with a total supply of approximately 15 million tokens (worth approximately $2 million). Tether’s CNHT currently has a total supply of approximately 20 million tokens. Stable currency issuer CNHC Group completed a US $10 million A+round financing Analysis based on this information:The CNHC Group has reportedly completed a financing round of 10 million USD, led by KuCoin Ventures with Circle and IDG Capital as other investors. The group offers a stable currency called CNHC, currently issued on Ethereum and Conflux blockchains, with a total supply of 15 million tokens, worth around $2 million. Stable currencies are digital assets that are pegged to a stable asset like a fiat currency or gold. They offer…
-
What is the official name of Biyuan Chain (Biyuan Chain Tieba)
Bitcoin is a PoW based Cryptocurrency bifurcation. After the Bitcoin block reward is halved, miners will start paying handling fees for the excavated tokens; Running verification nodes and transactional peer-to-peer services on the network to gain revenue and stability, and so on. Through this approach, everyone can participate in the consensus mechanism and earn profits. According to the announcement displayed on the official website of Ba Shi, they are developing a brand new BTM system Compared to the original chain stickerCompared to the original chain sticker: BTM_ Chain. io/BTM BTC BTM is a distributed storage project based on PoW, whose core value lies in solving data security issues in Bitcoin networks. Currently, there are over 20 nodes running BitTorrent Client (BSN) in the blockchain world, composed of different types of users – such as miners, wallet users, etc; Some people also join them in the community for technical research and development, in order to achieve decentralized control of the entire…
-
Flex Yang Launches HOPE: A New Distributed Stable Currency
On April 3rd, it was reported that former founder of Babel Finance, Flex Yang, launched a distributed stable currency HOPE with native encrypted assets as reserves. The Sepolia tes
-
FTX Delays Ledger X Auction Date
It is reported that FTX has changed the auction date of its derivatives trading platform, Ledger X, from March 22 to April 4. It is reported that this is the second time to modify the auction date, and the auction venue is Sullivan& Cromwell office, sales hearing will be held on April 12th. The notification of the successful bidder shall be sent within one working day after the auction ends. FTX modifies the auction date of derivatives trading platform LedgerX to April 4th Analysis based on this information:FTX has announced a second delay in the auction date for its derivatives trading platform, Ledger X, from March 22 to April 4. The auction venue remains the Sullivan & Cromwell office, with a sales hearing scheduled for April 12th. Successful bidders will be notified within one working day of the auction’s conclusion. The delay in the auction date suggests that FTX may be struggling to find a buyer for Ledger X. This…