In five years, the bitcoin mining will become absolutely unprofitable because of the too rapid growth in the prime cost of the first cryptocurrency. This conclusion was reached by analysts of financial conglomerate Citigroup, reports Bloomberg.
According to the analyst of the company Christopher Chapman, by 2022, mining will be cost-effective only with a bitcoin cost above $ 300,000. By the same time, the total electricity consumption for bitcoin production will be equal to the consumption of all Japan and will be limited to the governments.
We don’t think that those levels of mining can be reached, and that governments will regulate/tax miners as a way of reducing the power consumption.
It is noteworthy that the expert also believes that the cryptocurrency community will have to change the earnings model and switch to the Proof-of-Stake algorithm. In this case, the winners will be participants, who initially had more cryptocurrency.
As the current arms race is not in the interests of established miners we think that the BTC network may move to a proof-of-stake model; particularly if such a change is implemented by major rival ethereum. Such a move would not be uncontentious, but may be necessary for the survival of the currency.