Consider for example BTC and BCH (and possibly BSV) that are coins with significant market capitalization and share the same algorithm (SHA-256). We observe:
(i) Large miners (or mining pools) divide their hash rate between BTC and BCH (and possibly BSV).
(ii) Typically the mining profitability of BTC and BCH (and possibly BSV) is not exactly the same.
(iii) There are other SHA-256 coins with smaller market capitalization, but significantly higher mining profitability.
How do profit-seeking miners determine which coins to mine? How do they decide what fraction of their hash rate to allocate to each coin? How do they determine when a coin is "too small to mine"? Does too frequent switching "waste time", or is switching near instantaneous?
What are the main risk factors they take into account? Is the main concern price volatility and the fact mining reward cannot immediately be converted to USD?
P.S. I understand some hash rate is not allocated optimally, for example because of miners not paying attention or wanting to support a given network for personal reasons. I am focusing on somewhat professional mining operations where maximizing revenue is a priority.
You can get bonuses upto $100 FREE BONUS when you:
💰 Install these recommended apps:
💲 SocialGood - 100% Crypto Back on Everyday Shopping
💲 xPortal - The DeFi For The Next Billion
💲 CryptoTab Browser - Lightweight, fast, and ready to mine!
💰 Register on these recommended exchanges:
🟡 Binance🟡 Bitfinex🟡 Bitmart🟡 Bittrex🟡 Bitget
🟡 CoinEx🟡 Crypto.com🟡 Gate.io🟡 Huobi🟡 Kucoin.
Comments