Pros and cons of cryptocurrency mining in 2020
The financial crisis and COVID-19 have restored the faith in mining.
The leap year 2020 began with major shocks in the global economy that have undermined the confidence in traditional financial instruments. The coronavirus epidemic was added to it in march, stopping the economics of entire countries, and made everyone to have a completely different look at the weaknesses and strengths of mining.
The trade war between the United States and China, the lack of coordination among oil exporting states, and finally the Covid-19 pandemic spread a real panic on world exchanges. Each of the above factors would be more than enough for a global financial crisis in any other year, however, this leap year is going to stick in everyone’s memories: the first quarter of 2020 will long be remembered by financiers around the world by an exchange storm that made traditional defensive strategies useless.
The usual behavior of an investor in the event of serious turbulence in world markets basically narrowed down to transferring funds to assets with high reliability: US dollars, gold or bonds. Neither the trade wars nor the oil crisis had no effect on the effectiveness of this strategy, but the outbreak of the coronavirus made investors confused.
As it happened that in addition to Italy and Spain, the US is currently suffering the most from the pandemic, and from what we see in the news, which comes from North America today, the local authorities and the medical community can not turn the tide. This means that the crisis in the US economy will escalate, and recovery period will be delayed. Moreover, for an indefinitely long time.
In such circumstances, using the American dollar as a protective asset to save funds is at least strange. The current situation prompted investors to search for other assets, which could help them save capital in such a difficult time. So cryptocurrencies became a lifesaver!
Inside the cryptocurrency community it was known since the end of February, that digital money will become more popular than ever because of the pandemic and the accompanying financial crisis. Since mid-March, projections began to come true, and in the first decade of April it became clear that big money really returned to the cryptocurrency market. On April 6, the Bitcoin exchange rate overcame the $ 7,000 mark and on April 7 it cost more than $ 7,300, and its total capitalization exceeded $130 billion.
The sustained growth of bitcoin cost, the negative situation for traditional investment instruments, as well as the new high-performance mining equipment market entry, allowed to return the general concern to the digital money mining. Over the past few months, thousands of new miners have connected to the network of bitcoin.
The advantages of mining in today’s circumstances outweighed all the disadvantages. The massive return of miners to the bitcoin network has become a powerful factor that supports the rate of this cryptocurrency at attractive levels for mining. New high-performance equipment have compensated the increase of the network complexity. And what about the legalisation of mining? Due to constant increase in the number of mining hotels, cryptocurrency mining is becoming a completely legal business for an increasing number of people all over the world.
However, if we are talking about mining hotels, the tariffs for hosting are even more attractive, since they have certain preferences from electricity suppliers as very large consumers, or even, such as the ECOS mining project, have their own quota at the capacity of hydropower stations or thermal power plants.
