The Great Blockchain Hash Arbitrage

There is a lot of talk in the media about the popularity of various digital currencies and tokens. Typically the arguments related the recent cyber attacks, changes in regulatory positions, press releases by startups, growth in venture investments or a completion of a proof of concept by a corporation. Rarely are predictions based on economics of the platforms. Once a quarter I like to review changes in the underlying ROI of various blockchains. Economics change for many reasons, for Bitcoin it is the 2-week (2016 block) hashrate adjustment, the halving every few years for Ethereum the factors including use of gas by ongoing projects and so on.

Unfortunately you need to roll your own spreadsheet if you want your own assumptions as sites vary in their methodology. This time I used Coinwarz to compare profitability per digital token. The site analyzes 73 digital currencies of the active universe of 600+ altcoins.

Their analysis has interesting insighst

  • 79% of the altcoins cannot be profitably mined
  • Both Ethereum and Ethereum classic are much more profitable (1000% more) to mine than Bitcoin
  • Longevity of altcoins do not mean success as Namecoin is the least profitable on the list and one of the oldest

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