The mining hash rate for Monero has tripled following a recent change to the cryptocurrency’s mining algorithm. The upgrade, called RandomX, is meant to make mining on the network more “general-purpose CPU” friendly. But the surging hash rate means Monero mining profitability has fallen off a cliff.
The change was implemented via a network hard fork—a non-backwards compatible blockchain upgrade. The upgrade implemented a new proof-of-work mining algorithm that uses “random code execution together with several memory-hard techniques.” Its purpose is to minimize the efficiency advantage of specialized cryptocurrency mining hardware, typically referred to as ASICs (application-specific integrated circuits).
In the seven days following the algorithm change, mining hash rate on the Monero network climbed from around 300 million hashes per second (MH/s) to a peak of 950 MH/s, according to data from Bitinfocharts. In the eight months prior to the switch, the mining hash rate on the Monero network had held steady at around 300 MH/s.
Following the surge in hash rate, the knock-on effect caused the profitability of miners—looking for a share of new XMR tokens—to drop from around $0.30 a day per 1,000 hashes per second (kH/s) to a current low of just $0.10.
The last time the network saw a big change in hash rate (and miner profitability) was just after Monero’s March 2019 hard fork, which had the inverse effect on the network. The change at the time caused hash rate to drop by over 70% and mining profitability to skyrocket from $0.11 a day per kH/s to a high of around $0.45.
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The March hard fork also included a mining algorithm change that was also designed to kick ASIC miners off the Monero network. Prior to the March hard fork, the privacy-focused cryptocurrency’s hash rate had climbed from around 320 MH/s to just under 1000 MH/s. After the switch went live, the hash rate dropped to a momentary low of 140 MH/s—but the mining network soon stabilized back around 300 MH/s, where it spent much of this year.
Despite the cryptocurrency’s hash rate and mining profitability fluctuations, the price of Monero has held steady at around $53 since the latest hard fork went live. It’s unclear if Monero developers were expecting such an effect following its latest proof-of-work change. But if it continues, and mining profitability continues to fall, don’t rule out another mining algorithm switch next year.