Why 2018 Is the End of Mining?

Why 2018 Is the End of Mining?

27/09/2018 Off By Johnson

Potential investors-miners are wondering whether it makes sense to invest money in equipment that may become useless in a few years – not because of the increased complexity, but simply because the last coin was received. Other investors who do not plan to mine, but consider cryptocurrency as a promising asset also fear the moment when the last blockchain will be calculated and the mining will end. But will the end of mining really come and what will happen after the end of the emission of the cryptocurrency?

Mining involves solving a mathematical problem (a hash) using computer hardware. Miner gets a cryptocurrency coin when the hash is solved as a reward for the amount of work miner’s hardware contributed to solving the problem. Hash then forms a new block, which contains all the new and previous information on the blockchain.

When the maximum amount of coins allowed in circulation is reached miners will stop receiving rewards for solving each hash. At that point, hashes will still continue to be calculated to ensure the continuation of blockchain network operation. Otherwise, users will not be able to make or receive payments. So network will still depend fully on miners and their hardware to operate.

What Will the Miners Do?

It is possible to forecast the situation for the network of cryptocurrencies that exist due to mining that certain companies will be willing to finance miners. The behavior of the miners, however, may differ if their interests do not coincide with the needs of the network. In that way, it is possible to describe the two variants of actions.

Option 1. The optimal development of events is the coincidence of the interests of the miners and the willingness of the network to ensure these interests. If the further calculation of the hashes after the end of the issue of coins is still beneficial to the miners, they will continue to make up the units using their equipment, servicing the transactions, and maintaining the network.

Option 2. If the profitability of mining after the completion of the emission of a certain cryptocurrency will greatly decrease and cease to cover expenses and generate revenue, the miners will transfer to the network where this income is available. This has been happening for several years in a row: single-lane miners, discovering that bitcoin is unprofitable to mine, set out to mine the Ethereum.

There are other possible reasons why mining will become unprofitable. The bottom line is the miners will either sell unprofitable equipment, or start leasing as a data center or use it for any purposes, which is not related to cryptocurrencies. For example, in the field of artificial intelligence or other that requires powerful computing systems.