The energy-intensive Proof of Work methods of validating transactions on the blockchain is facing critical backlash in 2022. Although the backlash was not among the reasons behind The Merge of Ethereum, it has been completed successfully since 15th September 2022. Hereon, the Ethereum blockchain no longer relies on pow crypto mining activities to validate transactions but uses Proof-of-Stake or PoS.
In the blockchain’s Proof of Stake consensus mechanism, its users stake a percentage of their crypto on the network. Against staked crypto, the users are allowed to validate transactions on the blockchain, thereby supporting the blockchain.
Are there any top pow cryptos left, with ETH moving forward to the PoS system?
Moreover, how fares the pow crypto mining profitability after the ETH Merge? Let’s learn!
PoS & PoW Crypto Mining in 2022-23: Profit or HODL?
The proof of work crypto mining did serve to be a computationally intensive security method, but PoS builds around it. Making users stake a sum (32 ETH) on the blockchain node ensures the crypto algorithm-solving user has the blockchain’s well-being in mind.
Alternatively, centralized crypto staking activities concern some users since crypto exchanges like Coinbase allow it through their platform. Likewise, groups or entities of different strata collectively hold a major stake in Ethereum.
Lido, a community-run validators collective, owns about 30% stake in ETH, with Kraken-Coinbase-Binance collectively holding another 30% – over half of the Ethereum value trusted to four entities.
Is Proof of Work Crypto Mining Still Profitable?
The simplest answer to the question above is a stark no. However, the answer drastically changes when the entity asking the question is a crypto mining firm. Because a crypto Mining Firm can perform over +500 MH/s daily, it can continue to mine cryptos profitably.
Still, even the crypto mining firms are under pressure from the emerging environmental concerns brought about by high CO2 emissions. For instance, the Ethereum PoW network previously consumed enough energy in a month to power the whole country of Chile, yes, industries included.
To combat such pressure from social committees and environmentally aware governments, crypto mining firms are adopting greener energy sources. Everything is on the table, from solar to turbine and wind energy as it becomes available, except for nuclear and fossil fuels. In turn, numerous countries have banned crypto mining activities altogether, with stricter penalties for breaking the law.
But yes, crypto mining is profitable, provided the mined crypto does not run an ASIC-resistant system. Otherwise, it’s back to square one—[ASIC is an application-specific integrated circuit explicitly created for mining crypto].
Best Hash Rates from POW Crypto Mining in 2022-23!
Before the Ethereum merge, the Ether token offered one of the highest Hash Rates from proof of work crypto mining activities. But, the current crypto world landscape, specifically for proof of mining activities, only has a few yet well-known stars. Check them out here!
Apart from them, the present day Crypto mining has changed significantly from, say, back in 2015. Today, Crypto mining costs more money per kW/h. Additionally, crypto regulations further either restrict their trading and staking or outrightly ban it.
Still, nations like Russia have allowed crypto mining activities. However, its only as long as the crypto is not mixed with their fiat currency and its fiat money economy.
So the best hash rates are determined by a number of different aspects:
- Type of Crypto Mining Equipment (ASIC, GPU, CPU, etc.)
- Computational Power of the Mining Rig (MH/s, TH/s)
- The Complexity of the Blockchain Network Algorithm and Traffic
- Crypto Token Use Cases & Eco System
The latter aspect plays an important role in 2022 as it ultimately decides the value of the crypto. For instance, any crypto that can only be exchanged with another crypto but cannot be used to make local transactions or cannot be convertible into fiat money has limited growth.
In contrast, crypto coins like Ravencoin, running on the Proof of Work consensus mechanism or Ethereum Classic, still offer plenty of use cases. Both can be exchanged for purchasing services or goods, and yes, buying NFTs is also possible for holders of RVN & ETC.
Also Read: Web3 Decentralized Education Programmes (Ed3) For Future Learning!
Final Words
The proof of work or pow crypto mining industry is yet to die out as greener energy sources are being developed. Furthermore, it will take a massive crypto crash to even relatively make long-time crypto holders consider selling their crypto. [HODL Crypto! – anyone?]
Otherwise, crypto is already advancing to become a global economy by taking its environmentally responsible measures as possible. The 2020-30 decade is indeed shaping up to be the Web3 decade!