Josh Metnick, the managing director of Random Crypto, a company that offers a new tool to calculate profitability of crypto mining, states that similar calculators fail to prove the truth about mining cryptographies like Bitcoin : doing so is usually profitable only for large companies.
Metnick said Coindesk who broke the story:
"At the writing of this e-mail and at the price of bitcoins, there is not one manufacturer selling an ROI [return on investment] Positive machine at the retail level Take a moment to stop on that. "
Metnick, a crypto-miner from 2013, told Coindesk that he created the instrument after being repeatedly robbed:
" This computer was born for many years to be cheated in many ways by mining companies … I spent most of my life – years, really, many years – trying to chase the Butterfly Labs, Advanced Miner and KnCMiner for the millions of dollars that I sent them before escaping with my lifelong savings. "[19659004OgginumerosemonetecrittografichecomeBitcoinvengonogenerateinprocess"proof-of-work"
In work-testing systems like Bitcoin," miners "in the network download Bitcoin software for take part.
So they use their computers to process encrypted transaction data in blocks before competing, more or less, in a compute-intensive contest to guess a long random number set by the software.
The targeted number, once guessed, is then used to cryptographically seal the b lock, and the computer that guessed the number wins a 12.5 bitcoin "block reward" (currently worth about $ 10,000) .
Of course, the more computing power one can direct to "work" the greater the chance that one has of winning the reward for the block.
The realm of coin-mining labor trials has become increasingly competitive as companies such as state-supported companies such as Bitmain have established dominance over both the mining industry and the production of "mining platforms".
producers however continue to sell machines to small operators without necessarily disclosing market realities.
Metnick argues that vendors of popular mining calculators such as CryptoCompare and CoinWarz have made the situation worse by giving an inaccurate picture of the true potential of extracting some popular currencies:
"What we have discovered, from several years to this part of the observations, is that all the major bitcoin mining calculators in circulation show the extraction of bitcoins put as "profits", instead of what it really is: output. "
In other words, a data mining system could win block premiums, but if the current price of bitcoins is falling, this could easily mean mining at a loss.
A managing director of a mining pool in Vietnam is accused of having recently taken off with $ 35 million of investor money. The CEO claims to have done so because of the non-profitability in the cryptographic markets, which were contracted for most of 2018.
Metnick claims that the sites of mining calculators failed to accurately represent the "difficulty" "in mining networks, a feature of Bitcoin mining software designed to regulate the supply of coins and ensure that the last bitcoin of 21 million is mined in 2140.
According to Metnick:
" The difficulty of mining it has grown exponentially since the advent of bitcoin Neglect this, or not incorporating this fact, this reality, in a mining computer, should be illegal. "
Metnick promises that the Random Crypto calculator will more accurately measure the difficulty and the nature of mining in general:
"Our goal is not to show mining as profitable or unprofitable – our or bijective is to bring more truth, accuracy and transparency to mining [proof-of-work]. Sometimes mining is profitable and sometimes it is not. The broader framework is to create tools and reporting systems to keep hardware manufacturers honest. "
Bitcoin experts like Jimmy Song and Rodolfo Novak have advised the miners to be prepared to operate in a prolonged loss until they can sell their coins when markets have increased.
Bitcoin miners have been also advised to take advantage of Bitcoin futures to help protect against price fluctuations.