Tribe Technologies
Trending >

Cryptocurrency mining is dead, Bruce Croxon says

Crypotcurrency mining

The tide may be turning on cryptocurrencies, the mining aspect of it, at least.

As the energy costs required to generate tokens like bitcoin and ethereum keep climbing, mining is becoming less profitable, while at the same time, the powers that be — regulators, tech giants like Apple — are making it harder for criminal elements to profit from mining.

Effectively, those realities spell the death knell for crypto-mining, says Bruce Croxon, venture capitalist and cofounder of Round 13 Capital, who maintains that, in truth, this is a good thing for the developing cryptocurrency market.

As the price of leading cryptocurrencies bitcoin and ethereum continue to drop, mining companies who have invested millions in mining infrastructure are seeing their profit margins shrink at the same time that the sheer computing power needed to produce tokens continues to rise.

At the same time, more stories are surfacing of computers and networks being hacked for mining purposes. Recently, malware has been discovered on Amazon Fire TV Sticks which highjacks streaming devices to serve as miners. Meanwhile, Apple has updated its developer guidelines to restrict apps that drain battery life, generate a lot of heat and put unnecessary strain on iOS devices — all hallmarks of cryptocurrency mining.

Croxon says that the Apple announcement is just a sign of the times, as the industry becomes more regulated and effectively moves beyond the initial currency mining phase.

“This is not as big a story as it sounds. There’s not enough power in mobile devices to mine anyway,” Croxon said on BNN Bloomberg’s “The Disruptors“. “I think that overall this is a positive sign for the crypto-market. It’s another example of regulation being imposed to push out the people who are doing things they shouldn’t be doing.”

“Crypto-mining is no longer a great place to invest because the costs are too high and the pushback is too strong. The actual mining, where the market started, is done. It’s commodity status now,” he says.

Currency miners continue to open up facilities, however. A new US$500 million mining farm is currently being constructed in upstate New York, while in Canada, the Quebec government recently did an about face on its previously announced decision to cut off approvals for new mining facilities, now saying that it will regulate the sale of energy to mining firms so that the province can still benefit from the industry.

Croxon says that the souring economic realities of crypto-mining are actually pushing the sector to develop new approaches.

“It’s leading to alternative ways to generate cryptocurrencies. Proof of stake, for example,” he says. “There are different ways that cryptocurrencies are being generated, just not as much in the old way anymore, just because it’s too expensive.”

More Cantech Blockchain

We Hate Paywalls Too!

At Cantech Letter we prize independent journalism like you do. And we don't care for paywalls and popups and all that noise That's why we need your support. If you value getting your daily information from the experts, won't you help us? No donation is too small.

Make a one-time or recurring donation

About The Author /

Jayson is a writer, researcher and educator with a PhD in political philosophy from the University of Ottawa. His interests range from bioethics and innovations in the health sciences to governance, social justice and the history of ideas.
insta twitter facebook


Leave a Reply