I find it perplexing that so many (especially newbies) don't seem to be concerned about the pending Eth POS. I believe the following to be facts but if anyone can rationally argue any of these points, I would be very interested to hear it. It's quite possible I'm the stupid one but so far I haven't heard any reasonable rationale to counter the following logical chain.
1. Eth goes POS
2. Immediately, all the gpus currently mining Eth, switch to mining much smaller coins.
3. The enormous amount of hash power causes an enormous increase in difficulty for these smaller coins, resulting in:
4. Smaller coins mining profitability crashing through the floor, way below the electric cost for most miners.
At the moment, other coins are profitable. Not as profitable as Eth but nonetheless still can generate more revenue than the electricity costs. But consider a 100x increase in hash power that will result when erstwhile Eth miners switch over. 100 x hash power = 1/100 revenue per hash (This is a very rough approximation). Therefore if a card is currently earning $1 a day in revenue, it will drop to 1 cent a day. Obviously no profit at all here.
Of course very quickly people will start turning off their rigs when they see they can no longer make money. After a short period of time (weeks maybe), difficulty will drop and an equilibrium will be reached whereby the few miners with the lowest electric cost and the most efficient cards will be left mining with some degree of profitability. But the majority of current miners will be out of the game.
This is not my opinion, it is factual. Unless someone can fault my logic. (Please, please do!)
The Eth POS is not like a bear market. It's a game changer for gpu mining. There is no other POW coin that is anywhere near Eth's dominance. The best you can hope for is that EIP1559 continues to be delayed because when it happens, it will be the end of gpu mining for most people.
Probably the worst time ever to be buying overpriced cards and starting mining.
Great topic poby!
Actually it concerns me a lot and this is why today I bought the necessary hardwares to run an ETH 2.0 node operator...to slowly prepare for the worst.
Your assumption can be correct but there's probably a lot of factors you don't consider.
First, you don't mention the price of the altcoin can increase and offset the increased difficulty like it happened with ETH for the last weeks.
Also there's quite a lot of possible Altcoins we can GPU mine so we can expect quick migrations from one coin to the other way before the profitability is less appealing. You are referring more to ASICs for most of them you cannot switch to mine another coin because they are application-specific. On HiveOS in few click you start mining another altcoin.
Nevertheless, I do think the profitability will fall ( maybe -30% at EIP1559) and maybe much more at ETH 2.0.
I think ETH at the actual price is a good opportunity to buy some. By the way on Rocket Pool you will be able soon to stake as little as 0.1 ETH and to run a node instead of 32 ETH, it's 16 ETH + 10% for the collateral.
I have been playing with the rocket pool calculator and if you do abstraction of the ETH you have to stake to run a node, it's suuupppeeerrr profitable as much as mining ETH 2 weeks ago. Of course market conditions are always changing so it's hard to do accurate projection but being a fan of Vitalik Buterin and reading a lot about ETH lately I do believe it's the future.
Here's the rocket pool calculator:
https://www.rocketpooltool.com/The 16 ETH you have to stake is really the barrier to entry here!
But the thing is that these ETH you don't lose it, in contrary with hardwares for mining you'll be able to recover it in the Phase 2 of ETH 2.0 and Rocket Pool after a certain delay.
Viva Rocket Pool!