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When the hardware is no longer able to mine profitably, then we use it for something else.
Large enterprises as well as startups are investing billions into blockchain technologies and the computational power from these miners can be used to provide the physical infrastructure these businesses rely on. The cost of the container itself is marginal compared to the GPU/ASIC price. When they are completely obsolete and cannot provide any more value, the entire unit will simply be replaced. That's part of what the 25% reinvestment is aboutgrowth and deprecated MMU replacement. That is all part of the ROI calculations.
The most important part of the above to me seems to be the first sentence.
My question is...what factors will cause a mining unit to become unprofitable...it seems I've seen any times that as the market grows larger, mining becomes less viable, but I would logically think the opposite is true...can someone explain this paradox to me please?
Hi !
I can try to explain it. But maybe I am wrong. It is actually very easy. You have Proof of Work crypto like Bitcoin, dash, Litecoin and ethereum that you can mine. There are also many many others. Most of this coins have limited supply, So you can only mine that much. On coinmarkepcap for example you can see Total supply ( how many coins are there ever gonna be, btc 21 million) and how much are there already mined and on the market. To avoid that everything is mined very fast ( for example in one year) and the market is flooded with coins, what could lead to Price drop (imagine All bitcoin was mined in 2011 when few people knew it), most coins have difficulty adjustment and reward adjustments. So if a lot of people are mining, doing work, difficulty goes up and with time rewards also get less per block ( please read white paper of bitcoin by Satoshi). So for example now a lot if people mine bitcoin, look at difficulty charts of last years. Difficulty is high. Asic miners brought mining to new level as they do more 'work' (they can calculate faster ). And with time as explained in Bitcoin white paper, rewards are reduced. So now in 2017 you saw huge rise in difficulty and less rewards. The people who mine most effective ( low electricity cost, effectiveness with good cooling, good software but also most hashpower get have the most left of their rewards) As price of bitcoin keeps rising, you still get profit from mining. Also big mining farms with tens of thousands miners already exsist, this is why these 1000 MMUs are a joke, and in these farms miners are joined in Pools/Grous to compete with others for the award each block. These companies can get good deals on electricity, miners as they buy in bulk. Even John McAffee started one. Secondly because they have everything in big facilities, maintainance can be done more easily as they are close to eachvother.
Then you can mine alternative coins and sell them with a profit. If I look at the top 10 crypto 1 or 2 years ago, a lot has changed. Mining the wrong coin could mean losses. For almost all top crypto with PoW algorithm there are this super computers or asic miners, except Monero 😀.
So this huge mining farms oppose a little bit the decentralized concept of crypto, this is why Ethereum wants to go to proof of stake so they don't get sabotaged by miners.
But the most important point is, to mine with profit you really have to know what you are doing. Spending a lot of money on equipment that is outdated in 6 months can be fatal. Just look at your PC or cellphone, how fast is the turnover? And as crypto is just starting to boom, a lot of companies are going to develop miners. So buying expensive asic miners putting them in a container worth >100 000$, in the dessert because of the cheap electricity and then saying with 25% of earnings to cover the new hardware, just shows how clueless Envion is.
160% profit in first year! This is just funny and unrealistic. It is bate for greedy people