By 2022 Mining Will be Profitable at Bitcoin's Cost of $300,000
Mining cryptocurrencies in the near future can cease to be a profitable business. According to a study by a Citigroup's analyst Christopher Chapman, by the year 2022, Bitcoin's mining will be profitable at a price ranging from $300,000 to $1,500,000 per 1 BTC, as under the current conditions mining will consume as much electricity as the whole Japan does.
"We do not think that mining will reach such volumes. Governments of countries will begin to regulate or impose taxes on miners as preventive measures to reduce energy consumption," Chapman said.
To ensure the work of the Bitcoin network a proof-of-work system is used. The computing power of miners' computers is used as a confirmation. This method is highly energy-intensive, and the reward for mining falls every year, since the emission of Bitcoin is limited.
This situation gave rise to discussions about the possible change of the Bitcoin protection system to the proof-of-stake system, which is based on the actual presence of the cryptocurrency in the network participants' hands rather than the computers' power.
"Since the trend is against the miners' interests, we believe that the BTC network can switch to a proof-of-stake model, especially if this transition is made by their main rival, Ethereum. This transition will cause many disputes and discussions, but it may be necessary for the continued existence of the cryptocurrency," Chapman said.