Mining profitability: Dash mining remains strong


Jul 2, 2019
A number of prominent cryptocurrencies, including Litecoin, Bitcoin SV, and Bitcoin Cash, have seen hashrate drops and now face future mining profitability issues. Yet, in terms of mining profitability, Dash mining remains strong despite an ecosystem-wide drop.

What’s the problem?

According to data pulled from BitInfoCharts, several major cryptocurrencies have made very little revenue from their network transaction fees. This calls the future viability and profitability of Bitcoin Cash, Bitcoin SV, and Litecoin into question. With all of them showing a relatively steady decline in mining profitability over the last year.

Miners that work on proof-of-work networks, are compensated by fees in their cryptocurrency as they validate transactions. These proof-of-work networks have a finite coin supply. This means that they would need to generate enough usage to compensate miners fairly and maintain a good hashrate. Things don’t look too good for Litecoin, Bitcoin SV, and Bitcoin Cash at the moment.

Where does Dash come in?

Network hashrates have been on a steady decline (or have stagnated) over the last year for the cryptocurrencies mentioned earlier. This is largely due to transaction counts, and declining miner profitability. Understandably miners aren’t interested in a network where they can’t make a good profit. Litecoin, BSV, and BCH have all shown decreased hashrates, or stagnated over the past year, according to data from BitInfoCharts.

In terms of profitability, Dash mining remains strong. The Dash hashrate is up to around 4.09 petahashes at the time of writing, up from 2.68 petahashes this time last year. Furthermore, Dash has seen strong growth in another key area: active addresses. Dash is outpacing its stagnating competitors. It’s consistently out-doing Litecoin and posing a clearer threat to Bitcoin than many of its competitors (although that threat is still not massive). Active addresses tend to go hand in hand with more users on the network. This could be an indicator that Dash will see enough growth going forward for it to generate sufficient profitability from fees, to sustain its miners after its total supply of 18,900,000 has been reached.

Why Dash?

When we look at mining profitability, Dash mining remains strong even in the face of an ecosystem wide drop. A steady hashrate, a younger ecosystem (more time until it reaches total supply; must rely on usage fees to function), and growing active user addresses all contribute to the future viability of the system. Either way, things are looking good for Dash.

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