The Profitability of The Echoes of The Past
What were once popular slogans, proud terms and battle cries of the crypto industry are turning into relics of the past as the market of cryptocurrencies has undergone tremendous changes over the last year. 2018 saw what is likely to be the end of an era in the crypto industry as such terms as Airdrops, ICOs and mining have played their last tunes and withered into the past like discarded instruments.
2017 was the year of the ICO boom, which saw the explosive spawning of a huge number of projects, each promising innovations, decentralization, revolutions in industries, disruption, the list of terms goes on into infinity, as marketing strategies became ever more elaborate to attract the hordes of enthusiasts seeking to make a fortune on instant pumps and dumps.
Of course, one of the most popular instruments used during the ICO boom of 2017 and 2018 was the Airdrop. The Airdrop itself is not such an innovative instrument, but a renamed marketing technique that can be bluntly called incentivizing or rewards. The concept is just as simple, as ICO projects used to offer a certain small number of their tokens to those willing to perform a series of tasks. The tasks themselves were usually rather straightforward and were aimed at inflating the number of project communities to create volume and an impression of popularity. By rewarding users for performing some tasks or sharing information about the project, the projects could ensure the availability of their tokens on exchanges and could build up anticipation for launch along with marketing.
However, the days of Airdrops are long gone, as users have lost faith in many of the tokens and are now engaged in more productive activities. Still, some projects are issuing airdrops, like Trakx, TRON, Traval, Thorchain and others with varying levels of success.
The ICO as a term can be pronounced dead, since it is now being actively replaced by more modern forms of the phenomenon. Since utility tokens have proven to be useless, projects seeking funds are now renaming their campaigns into STOs, crowdfunding, fundraising or rounds. The ICOs that have proven to be successful thus far in 2019 are Carnalife, which has partnered up with Microsoft, Stackr, and Quasa, which is seeking to implement blockchain into the freight industry.
The big question on the minds of many crypto enthusiasts is whether mining is still worth engaging in. It is true that the profitability of mining has fallen in recent times, and the trend is sure to continue. The profitability of mining Bitcoin remained at 50% throughout 2016 to 2017. Rent, electricity and maintenance of equipment have taken their toll under current market prices, and in 2018, the most miners can expect is a 30% return. 85% of all costs incurred by miners nowadays are attributed to electricity bills. Dmitry Shuvaev, director of development of BitCluster stated that the Asic Antiker S9 miner model can yield no more than about 3,963 rubles a month in profits. Given the average price of electricity at 3.5 rubles / kWh and all the associated costs like maintenance and exchange rate volatility, the best profit a miner can hope for can range from 490 to 600 rubles per month. It is undeniable that mining can still be profitable when the price of electricity hovers around the 3.5 rubles per kWh range. The breakeven point for mining Bitcoin is $2,989 per coin given the current levels of the hash rate. Things with Ether stand at just $39.
If exchange rates plummet below the indicated values, mining either of the two cryptos will become unprofitable and the miners can shut down their devices. But that does not mean that the miners need to get rid of the equipment immediately, as there is a chance that the market may return to profitable levels. In addition, there is another chance that the price drop will force thousands of miners to shut down their devices and this will reduce the complexity of mining, thus ensuring higher chances for rewards. Another alternative is to switch to masternode format and take part in staking, thus ensuring that the equipment will continue to serve and will still yield comparatively good rewards.
The choices facing the participants of the crypto market are quite difficult under current market realities as what was once a galore of the ICO bacchanalia has turned into pages for the history books. Nonetheless, there are opportunities on the market, one of which is to wait.
