Is crypto mining good for the planet and our lives on it, and do politicians actually like Bitcoin mining, or do they hate it? These questions have been on the minds of many crypto miners as of late.
You’re undoubtedly aware that the cryptocurrency market is experiencing a bit of a crisis, just like the rest of the global economy. With the current bear market, it’s only natural for the crypto mining industry to cool off.
Prices and expenses are rising, and the value of many cryptocurrencies is decreasing, so every miner has to think things through as the profits aren’t as high as they used to be. For some, there might not be any profits to speak of. But that doesn’t mean the crypto market is dead.
Let’s see why that’s the case and what you can do to evolve together with the market before it’s too late.
What’s Happening With the Crypto Mining Industry?
Before the pandemic and before prices started going up, the crypto mining industry started facing a big problem — it was becoming clear to everyone that the impact on the environment was no longer negligible.
Mining cryptocurrencies, especially Bitcoin, requires lots of energy. What’s more, with more and more miners on the market, it became clear that the mining industry was using up too much power.
The current Proof of Work system is, in many ways, inefficient precisely because it entails a miner solving a mathematical problem with the help of devices that use a lot of electricity. This can only mean high electricity bills and a significant environmental impact from creating all that energy.
Many crypto miners are looking for cleaner ways to get energy, but many aren’t. And the Proof of Work system is environmentally harmful. It’s not a catastrophe, but it’s not negligible, either. The Bitcoin mining industry consumes around 150 terawatt-hours of electricity yearly, equal to the whole country of Argentina, home to more than 45 million people.
With the rise in the number of crypto miners and mining farms, that expenditure will only get bigger and more problematic. But that’s not all. With prices rising, it’s not only environmentally unfriendly to mine specific crypto but also expensive. Profits are getting lower, and many miners are not seeing them any longer.
The financial markets are unstable, and so is the crypto market. In addition, with rising prices and higher electricity bills, it’s clear that reduced profits are inevitable for many miners.
As they cannot change the prices, miners are forced to seek alternatives. The good news is that those alternatives exist, and more are bound to come.
Alternatives to the Established System in Crypto Mining
The crypto industry has no problem adapting to change. We’ve seen many blockchains opting for the Proof of Stake system, which is much less energy consuming than Proof of Work.
The second-largest crypto on the planet, Ethereum, is already working toward moving to this system. Many believe that it’s not only more efficient when it comes to energy consumption but that it’s a lot more efficient overall and more secure for the network. But that’s not all. Alternatives come from all sides, not just in the consensus mechanism.
Some miners are thinking about multi-purposing the servers themselves or, more than that, finding new currencies to mine. Many cryptos are a lot more environmentally friendly and less expensive to mine. They typically use the Proof of Stake system but offer other unique features that make them less cost-prohibitive to mine in the current inflation-ridden landscape.
Diversification is crucial in the current state of the market, as well as in the long run. It’s rarely good to put all eggs in one basket, especially if that basket is becoming too costly, like mining Bitcoin and many other coins is.
We are also seeing projects looking to solve this issue and make mining more profitable. Moreover, some of them are looking to revolutionize the market.
Tomi is one of those projects. It offers additional mining options through its aNFT (autonomous NFT that can proactively start interactions with protocols and users without being prompted) that are far easier to understand and purchase than other options. This makes diversification easier in the overpopulated crypto market.
With all the available alternatives available to miners and new ones being developed, it’s clear that crypto mining is nowhere near dead. It’s just changing as the world and circumstances around it change.
Crypto mining is only evolving, and smart miners will grow with it. You need to ensure you’re one of these miners, but how you decide to do it is entirely up to you.