2017 will forever be remembered as the year of the digital gold rush.
Cryptocurrency mania had reached unbelievable heights by mid-December as everyone rushed, whether to invest in cryptocurrency or mine it, in the hopes of making some quick money. But just as the going was getting too good to be true, in 2018 the rates of cryptocurrencies plunged, and it was getting harder and harder to sustain crypto mining due to diminishing results – miners found themselves spending more for less reward.
So, are these digital miners eventually going to abandon their search like the miners of the California Gold Rush?
Even though headlines are screaming themselves hoarse claiming the crypto mining bubble has burst, a lot of industry insiders claim otherwise.
Venture capitalist Bill Tai put it best when in an interview he said that last year, “the bitcoin mining industry was this mysterious dark cottage industry, and it’s about to grow up and about to have elements of institutional scalability at all levels”. As cryptocurrencies evolve, so have the miners – they’re no longer tech students mining out of their dorm rooms; cryptocurrency mining is becoming a real business that a lot of big players are eager to get a piece of.
The Evolution of Cryptocurrency Mining
Cryptocurrency mining has come a long way from its inception back in 2009 when Satoshi Nakamoto created Bitcoin. It was made in such a way that anyone could help verify Bitcoin transactions and get rewarded with Bitcoins for it. People around the world were using their computer’s central processing units (CPUs) to mine Bitcoin. Eventually they realized they could no longer make profits through their CPUs, so miners moved to graphics processing units (GPUs). This move would create ripples in the PC gaming community as the prices of the graphic cards they usually put in their gaming computers skyrocketed due to miners buying all the available graphics cards on the market.
The gaming community is slowly returning back to normal, as GPUs are being replaced by application-specific integrated circuit (ASIC) mining. But as Bitcoin mining evolved, so did the many hurdles that lay in its path.
As miners started to mine on a larger scale, they realized they needed not just machines with high computing power, but they also had to choose the location where they would setup very carefully. While China was the go-to location for a while, miners soon had to look elsewhere because of government restrictions, as the country is actively trying to restrict the amount of power being used up by mining firms.
Canada: The New Hub of Crypto Mining
Canada, the miners soon realized, fit the bill perfectly. The Great White North had everything they were looking for. The country has vast areas of land, a cool climate (the computers get insanely hot as they chip away at those blockchain puzzles), low cost electricity, high speed internet and a government that is welcoming towards cryptocurrency mining firms.
Players like JV Driver are even offering plug-and-play crypto mining facilities; a completely self-contained mining solution, which can be easily set up, and only requires a suitable location and internet access. We’ve successfully helped deploy over 500 Petahash of computing power just in the last year. When it comes to crypto mining, it’s a much-needed game changer that proves it’s not all gloom and doom as some of the headlines claim.
The Future of Crypto Mining
Cryptocurrency mining will continue to change in the coming year and beyond. Right now, it resembles the 90s dot com frenzy where ambitious business plans were woven out of pure speculation and based on new technology that most people didn’t even understand properly, namely the internet. From its disorganized beginnings arose a superpower that dominates all industry and financial markets today.
Cryptocurrencies and crypto mining are not going anywhere anytime soon. Even with multiple countries introducing stricter regulations, the future of crypto mining looks bright. The slump in cryptocurrency prices is not indicative of a dying technology, in fact just the opposite: it reveals a new technology that’s just finding its feet. As it evolves into a formal structured industry, it’s likely to gain scale and security, and the ones at the helm of this digital ship could be the ones calling the shots in the future.