Experts believe that Bitcoin will remain the most suitable cryptocurrency for mining in the long term, despite its recent halving, because its price is more stable than that of altcoins, which can devalue very sharply. Those small farms who are still willing to stay in the mining game can opt for safer assets with high liquidity and capitalization, such as Litecoin (LTC) and Dash.
Rashit Makhat, Co-founder of Powerry, stated: “As a result of the Bitcoin block halving that took place on May 11, 2020, the reward per block was cut in half. To stay ahead in the market, miners must quickly upgrade their equipment fleet. The most popular machines until 2020, the S9 became unprofitable for miners in almost any region, including regions with low energy costs such as China. "
Are we migrating?
The price of BTC seems to be of little consolation to many, as Valarhash, who operates some of the largest mining pools in China, decided to switch to mining altcoins. Despite the recent 33% increase in Bitcoin's hash rate, Valarhash reduced his contribution to the network from 4,000 to 200 PH/s in March. Company mining pools Bytepool and 1THash, which at one time accounted for 9% of Bitcoin's total hash rate, have redirected their mining power to other currencies.
The transition to altcoins may require a significant upgrade from mining farms. Investments in ETH and LTC mining equipment have longer payback periods compared to BTC mining equipment. ETH and LTC mining requires higher operating margins and the equipment is more expensive. Scrypt-based altcoins like LTC, cannot compete with Bitcoin in terms of profitability and return on investment. As such, Ethereum's upcoming transition to proof-of-stake is unlikely to usher in a revolution within the industry.
