Will transition to PoS hit mining profitability?


14:01 07/09/2022

Will transition to PoS hit mining profitability?

The transition to the PoS algorithm, which was planned for the middle of September, has obvious consequences for switching miners to other cryptocurrencies. Except for increasing ETC and RVN blockchains' safety, the complexity of mining will rise significantly but will hurt profitability.

Some experts from the crypto industry shared their opinions about the current situation. So, Sergey Arestov (BitCluster) predicts increasing the complexity of mining by a factor of ten. The only way to avoid it – is an equal growth of tokens value, which is impossible.

Rising costs less than the level of complexity will lead to the situation when mining RVN, Beam, ETC is unprofitable. Thus, most crypto farms will have to switch off their hardware. In its turn, the complexity of blockchains will decline until the balance occurs. Arestov noted that only farms with cheap electricity continue to work. But in any case, 9 out of 10 miners would be turned off. The expert does not exclude that we could face other consequences, which are unpredictable today. For example, the ETH fork will be maintained by the majority of market participants and continue to work on the old algorithm. But it looks improbably.

The head of Hardvar.ru, Ivan Sharov, said that many miners have been selling their hardware off already with losses because of low demand and prices. In the first turn, it touches on those who got loans hoping for a regular monthly income. According to Sharov, the prospect of such a situation is dependent on the profit from mining other assets.

AMarkets representative Artem Deev also agrees with the negative forecasts, considering the field is under large-scale regulation and complexity increases. He supposes that the time of extra profit from digital currencies is in the past because it was based on the high demand for cryptocurrencies, a few miners, and affordable electricity.

The expert also admitted increasing regulation everywhere, forbidding this activity in China, energetic crisis, and rising sources prices amid a growing number of participants. All of these, according to Artem Deev, could become a base for declining profitability for all assets.

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