These five cryptomining trends will have the biggest impact in 2023
Cryptocurrency has undergone some significant growing pains in its rise to mainstream recognition. As crypto and its surrounding technologies have become more popular, increasing regulations and dramatic market changes have caused prices to rise multiple times and fall beyond many’s expectations. In the midst of these changes, it becomes increasingly important to keep up with the evolution of cryptomining trends.
The crypto market is moving fast and will likely see drastic changes as mainstream adoption grows. Here are five crypto mining trends that will have the biggest impact in 2023 to help you navigate these changes.
1. State regulations
Naturally, as cryptocurrency grows among consumers and businesses, it also attracts more attention from government bodies. Consequently, increasing regulation over crypto mining will significantly affect the market in 2023.
In September 2022, the White House released the first comprehensive framework for the development of digital assets in the United States. This framework included goals to strengthen enforcement actions by bodies such as the FTC and SEC to crack down on potentially risky, unfair or deceptive crypto practices. New legislation outlining legal mining practices and considerations will almost certainly follow.
Other legislative changes, such as funding US-based chip manufacturers, could also affect the prices and availability of crypto mining machines. Individuals and companies looking to capitalize on mining should pay attention to these laws to ensure they remain in good legal standing.
2. Privatization and mergers
These increasing regulations, on top of 2022’s difficult year for public mining companies, will affect other crypto mining trends. One of the most notable of these is a shift towards privatization and mergers among mining companies.
Public bitcoin miners lost a combined $15 billion in 2022, with all public mining stocks down at least 80% year-over-year. In light of these dramatic losses, many of these organizations will likely band together to spread the damage and combine their resources to aid in an easier recovery. Others will go private and forgo potential gains on the stock market in favor of fewer regulatory complications.
This shift will leave investors with fewer options, but it could help the market recover more quickly. It could also make resources like crypto miners more affordable when demand falls, opening up opportunities for aspiring miners looking to start or grow their business.
3. Sustainable mining
Like virtually every other sector, crypto mining will also respond to the growing demand for environmental sustainability. Conventional mining is energy-intensive, requiring switchgear and transformers of up to 1.5 gigawatts, and because most of the electricity comes from fossil fuels, this results in significant emissions. As environmental concerns increase, mining must be adapted to reduce this footprint.
Proof-of-stake cryptocurrencies can overtake more conventional proof-of-work alternatives for their lower energy consumption. Ethereum switched to a proof-of-stake model in late 2022, reportedly cutting power consumption by 99.9%, and others are likely to follow suit.
Likewise, sustainable mining methods such as using renewable energy to power and cool mining rigs will become more popular. Mining organizations that use these more environmentally friendly technologies may see more success than those that do not in tomorrow’s market.
4. Cloud Mining
Some cloud mining trends in 2023 will change how people participate in mining. One of the most impactful of these is cloud mining, where you pay for access to remote mining farms instead of running local hardware.
While graphics card (GPU) prices have fallen over the past year, building large-scale crypto mining machines is still expensive. It can also lead to significant energy consumption, depending on how you run it and what kind of crypto you mine. Cloud mining offers a more accessible and often affordable alternative.
For organizations with on-premises hardware, cloud mining provides an opportunity to further monetize operations. This business model could help offset losses from last year’s crypto winter.
5. International growth
The cryptocurrency market in the United States may have had a challenging 2022, but that has not been the case everywhere in the world. Crypto is still booming in some countries, so most of the mining growth in 2023 may come from outside the US
Latin America is one of the fastest growing regions, containing four of the top crypto-adopting countries in 2022. Much of this growth is coming from countries like Brazil and Columbia that are implementing national digital currencies. Likewise, some Argentine cities have begun accepting crypto tax payments to combat inflation. This growing governmental interest in crypto creates a more positive environment for thriving crypto mining companies.
Southeast Asia is another region to watch. The area is now home to more than 600 crypto and blockchain companies, which saw $1 billion in venture capital funding in 2022 alone.
Is Crypto Mining Worth It in 2023?
Given the problems the crypto market has faced in recent years, some potential miners may question whether crypto mining is worth it in 2023. The answer to that question depends on your goals, resources, and how you approach the practice.
Many crypto mining prices have fallen, making mining rewards less profitable. However, the cost of crypto mining machines has also fallen, and trends such as cloud mining offer lower cost approaches. After enough time, crypto mining can be significantly cheaper than buying crypto outright, so it can still be a more profitable way to capitalize on cryptocurrency.
Increasing regulations and competition raise the barrier to entry, so cryptomining may only be worth it for organizations with enough resources to handle the administrative burden and upfront costs. It is also best to approach it with tempered expectations, anticipating slow growth rather than the opportunity to make quick returns.
Stay up-to-date on evolving crypto mining trends
Crypto mining is still worth it in 2023 if you can anticipate and react to changing crypto mining trends. When you understand where the market is going and why it fluctuates, you can make the most informed decisions about how to take advantage of it. You can then safely and profitably use cryptocurrency.
