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In the past half month, the market of the entire crypto field has been fluctuating downward under the continuous influence of policies. Some currencies have even fallen by more than 60% in just half a month, directly wiping out the gains of the past six months. The market is unstable, assets are shrinking, and future uncertainty is increasing. Most short-term arbitrageurs who have no hope for this industry have cleared their positions and left the market, while long-termists are retreating and starting to think about how to plan for the next bull market. Among the many investment methods favored by long-termists, mining based on PoW and staking based on PoS are the most discussed, and there are also many different opinions on the comparison between the two. Today, ViaBTC will discuss with you which of these two methods is better? For PoW-based mining, we chose the RX588-8 card mining machine for ETH mining, and the parameters are as follows: Mining machine cost: 20,000 yuan Current average daily income: 0.00002409 ETH/M Note: Electricity fee is calculated at 0.4 yuan/KW·H Theoretically, daily static coin production = 0.00002409 X 240 = 0.0057816 ETH Daily electricity consumption: 0.4 X 1.4 X 24 = 13.44 yuan, converted into ETH is about 0.000791 ETH, accounting for 14% of daily income, daily net income: 0.0057816 X (1-0.14) = 0.0049721 ETH Theoretically, the total return required to recover the investment is: 20000➗17500≈1.14ETH Theoretically, the number of days required to recover the investment is: 1.14➗0.0049721≈230 days Taking into account the maintenance costs of mining machine hosting, the rough estimate of the payback period is about 260 days. A mining machine can generally mine for 3 years, so the static total coin production in 3 years is: 0.0049721 X 365 X 3 = 5.45 ETH After deducting the cost: 5.45-1.14=4.31ETH Theoretically, the static rate of return for 3 years is: 4.31➗1.14=378.07% Of course, the above assumptions are based on the scenario that ETH2.0 cannot be upgraded within three years. Due to the high technical difficulty involved in the upgrade of ETH2.0, this situation is entirely possible. If ETH2.0 can be completed by the end of 2022, the above physical mining method used to mine ETH can only continue for 18 months: Corresponding theoretical static income: 0.0049721 X 30 X 18 = 2.684934 ETH After deducting the cost: 2.684934 -1.14=1.54 ETH Theoretical static rate of return: 1.54 ➗1.14=87.72% From this we can see that assuming the ETH2.0 upgrade can be achieved by the end of 2022, the rate of return on investing in physical mining machines will be around 87.72%. However, graphics card mining machines can still continue to mine other currencies such as ETC, CFX, etc. The corresponding profit calculation will not be discussed here. Next, let’s talk about PoS-based staking mining. We will analyze DOT, which is a relatively popular mining platform in the market: Similarly, if the cost is 20,000 and DOT is priced at the current price of 150, then we have: Initial total stake: 20000➗150=125 DOT Theoretically, if 1,000 DOTs are staked and one valid nomination and verification is completed, the coin production will be 0.32. Under normal circumstances, the number of coins produced per day is generally 2: Theoretically, the initial coin production volume is: 0.32➗1000 X 125 X 2=0.08 DOT However, considering that the daily coin production will be re-pledged, the interest will be compounded, and the coin production will be cyclical, it is necessary to calculate the income. The calculation chart is as follows: It can be seen from the calculation chart that, assuming that the daily coin production is re-pledged to become the pledged coins for the next day, and the daily coin production is 2 times, after three years, after deducting the cost, the rate of return is only 101.36%. The on-chain transaction fees are relatively small and can be ignored. Based on the above analysis, we can draw the following conclusions: 1. Under the same cost, theoretically, the static income of Ethereum mining based on PoW is not as good as that of PoS-based Polkadot staking mining in the first year, because ETH is basically on the way to recovery in the first year, while Polkadot staking mining is already profitable in the first year (assuming that the currency price does not fall). However, the income of physical mining machines in the second year will catch up and eventually far exceed the income of Polkadot staking mining: theoretically, with the same three-year mining time, ETH's mining income is as high as 378.07%, while DOT staking mining income is only 101.36%, which is based on the fact that the upgrade process of ETH2.0 cannot be achieved within three years. If the upgrade of ETH2.0 can be achieved by the end of 2022, after deducting costs, the corresponding income will only be 87.72%. 2. In terms of flexible turnover of funds, the coins mined by ETH mining machines are not bound by lock-up. Especially if the computing power is connected to the ViaBTC microbit mining pool, the mining income can be automatically withdrawn without handling fees. On the automatic exchange page, all mining currencies can be automatically exchanged to USDT and BTC. Considering the high volatility of the cryptocurrency market, the ViaBTC technical team has specially set this function to perform automatic currency exchange once an hour. Of course, miners can choose manual exchange according to their own needs to facilitate currency storage. The unlocking time of Polkadot's pledge mining is 28 days, and there is no income during the 28 days of unlocking. It can be seen that the physical mining machine is more flexible in the configuration of the coins it produces, and can adapt to changes in the market to a greater extent to make adjustments in decisions at any time. Relatively speaking, Polkadot is more passive in responding to market changes after staking. 3. Investment cycle and capital entry threshold: If it is physical mining, the investment cycle is relatively long, and there are certain requirements for the capital entry threshold; if it is pledge mining, relatively speaking, the longer the investment cycle, the lower the capital utilization rate, but its capital entry threshold is lower. In general, if your investment style tends to be long-term and you have a high return on investment, it is recommended to choose physical mining machines. If your investment style tends to be short-term and you do not have such a high return on investment, you can consider staking. Even with the uncertainty of ETH2.0, the income from physical mining machines is still not low, and it is close to the income from Polkadot staking mining. In addition, there have been extensive discussions in the industry about the advantages and disadvantages of the two consensus mechanisms, PoW and PoS, so I will not go into details here. However, judging the advantages and disadvantages of investment methods under extreme market conditions based on the mining methods of two different consensus mechanisms has different reference dimensions and standards, and the opinions drawn are naturally different. Different people have different opinions. The above only provides one more analysis method. I hope that everyone can seek common ground while reserving differences and reach a consensus. |
