Prospects for mining cryptocurrency in 2018

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With the popularity of cryptocurrency, the demand for equipment for mining has also increased. However, if several years ago any person with access to a sufficiently powerful computer could become a miner, then the situation has radically changed in the last year, and past methods of mining cryptocurrency are already ineffective. We examined the most current trends in the sphere of mining of cryptocurrency for 2018.

Video Cards for Mining

To date, mining requires expensive equipment, and in particular - video cards. So, in June this year, the Chinese online trading platform AliExpress reported an increase in requests for the purchase of certain models of video cards, most suitable for the creation of mining farms. The most popular among Russian miners are video cards of Nvidia company - GeForce GTX 1060 and GTX 1070, as well as Radeon RX480, manufactured by Advanced Micro Devices (AMD).

Since these models are popular not only among Russian miners, over the past year, AMD's stock price rose by 64%, and the value of Nvidia's securities since early 2017 soared almost 88%. Experts attribute this growth to the increase in the number of miners in the networks Ethereum and other popular cryptocurrencies. This is also confirmed by published data, where it is noted that in the second quarter of 2017, 6.7% of Nvidia's revenue was obtained from the sale of video cards used for the cryptocurrency. Due to this, both companies, as well as ASUS, have already started issuing special video cards intended for the production of crypto-currencies. Also this summer it became known that AMD is developing a Starship processor with 48 cores,

However, experts warn manufacturers of equipment for mining about the future decline in the popularity of their products. According to Joseph Moore, an analyst at the American banking holding Morgan Stanley, the mining may become economically unprofitable in 2018:

"We assume that the total sales of video cards for the ether mining for the year 2017 amounted to about $ 800 million, but in 2018 this amount could be reduced by 50%."

The first reason for this recession Moore calls the planned reduction of fees to miners in the network Ethereum from five to three aether. The second is a change in the consensus algorithm with Proof of Work (PoW) on Proof of Stake (PoS), in which the ability to create a new block and receive an appropriate reward is proportional to the balance of the network user, rather than the amount of processing power. This tendency is also noted by the analyst of the Japanese investment bank Mizuho Vijay Rakesh, who is sure that in the first half of 2018, such crypto-currencies as ether will no longer need a video card:

"We think that in the first half of 2018 in the Ethereum network there will be a transition from the Proof of Work algorithm, which involves the use of video cards, to the Proof of Stake algorithm, for which video cards will no longer be needed."