Mining the cryptocurrency ether (ETH) using high-powered computer systems is no longer profitable, stated a CNBC report on November 13, 2018.
Individual Mining no Longer Profitable
If a recent report by CNBC is to be believed, cryptocurrency’s gold mining days might be a story of the past, as the activity is no longer a profitable one.
Crypto enthusiasts will remember the euphoria during last year’s crypto bull run, which saw virtually all the cryptocurrencies reach their ATH and attracted a lot of attention from the mainstream world.
The state of frenzy also turned a lot of heads towards the business of “mining” cryptocurrencies, where anyone could install mining rigs in their basements or dorms and earn digital currencies online.
However, a recent analysis by Susquehanna posits that mining ether is no longer a rewarding side-gig as the profits per month have taken a giant leap from about $150 per month last summer to almost nil for November 2018.
For the uninitiated, mining involves running the computer continuously as all the systems on a network compete among each other to solve complex numerical problems. The first system to crack the problem earns a set amount of ether or bitcoin.
Unfortunately, mining giants like Bitmain have created a private monopoly in the cryptocurrency mining business. A recent report stated that Bitmain’s hashrate is already at 42 percent on the Bitcoin network, and is on its way to reaching the fatal 51 percent mark.
Moreover, the value of ethereum has tanked by more than 70 percent this year, currently trading at about $177 according to CoinMarketCap.
The factors as mentioned above have caused a domino effect in the mining business of ether making it an unattractive market for small-scale individual miners.
Crypto Mining Losing its Shine
The crypto mining business has also impacted chipmaker Nvidia’s sales figures. Susquehanna semiconductor analyst Christopher Rolland stated the company’s QoQ cryptocurrency revenue has tumbled by almost $100 million.
“We estimate very little revenue from crypto-related GPU sales in the quarter, consistent with management’s prior commentary that they were including no contribution from crypto in their C3Q18 outlook.”
This sentiment is in stark contrast to Nvidia’s Q1 2018 sales results, in which crypto sales accounted for almost nine percent of Nvidia’s revenue. Notably, it’s not only Nvidia that has seen a downturn in the cryptocurrency mining business.
BTCManager reported on July 4, 2018, how Taipei-based computing chip and motherboard manufacturer Gigabyte Technology Co., Ltd. lowered its revenue forecast for the remaining half of 2018 citing low demand from cryptocurrency miners.