The drop in the value of the main cryptocurrencies since January without finding any stopping ground, is causing many miners to be mining “at a loss“ during the last weeks*.
The difficulty of the algorithms based on PoW, continues to rise or remains stable, while prices have been divided up to 4 in accordance with that cryptocurrency. The logic of a serious investor, turn off the machines to get the value of the coin that goes up or raise the difficulty and none of these two factors is being met. Greed or investment “Hold”, waiting for everything to “go up” again, keeps the difficulty while prices go down and down.
graphs of difficulty of the last months of BTC, ETH and LTC (Source: coinwarz)
The ROI, (return on investment) of some machines for mining, has gone from 6 months to 4 years, by the sum of both factors, the difficulty and the decrease in value of the cryptocurrency.
Why are you mining to losses?
The main factor of some miners is not the economic, but to maintain the security and strength of the network, so, it is the own community of the cryptocurrency that maintains the active nodes assuming the costs of machine and electricity.
Assumptions are, the speculation with ideal “HOLD”, the confidence in the recovery or stability of the value and even be stronger than other cryptocurrencies. The power of control can also be behind, since having a high percentage of mining of a blockchain can give advantages in some aspects in the future.
Various methodologies are used in trading to multiply the value of a cryptocurrency and get more benefits than the actual actual market value (such as futures and leverages that can reach up to x100), leading to 1 coin being mined. can play up to 100 times its value and, in case of benefits, be up to 100 times, being more profitable than the unique mining process.
Black Market and localbitcoin
Although we are accustomed to exchanging the value of the crypts in exchange, there is (as in the real world Fiat) a black exchange market where the value is higher than the market (therefore, more profitable in case of mining). The localbitcoin portal itself shows values above the value of exchanges, of buying and selling between individuals.
The difficult thing is not to learn, the difficult thing is to know how to teach.
Editor and coordinator of the free book “La era de las BLOCK punto COM”
CEO of bitcoiner.today