Mining Ethereum was a profitable business for humans in the past few decades with graphic cards (GPU’s) and increased rates in Eth.
Ethereum is an open-source, non hierarchic computer world which forms and unites together on a continuous series of “Blocks” or loops of purchases, known as BLOCKCHAIN. It is a technology that helps you to forward cryptocurrency to anyone for a modest fee.
In decentralized systems like Ethereum, we need to see that every member of the community agrees on the order of transactions.
This is the time when miners solve the arithmetic difficult puzzles to generate blocks, which makes the path to secure the network from overwriting.
Impacts on profits of mining Ethereum.
- To purchase a brand-new GPU after the US taxes, the return on investment is not considerable anymore
- The increased rate of electricity bills does not permit a suitable risk and reward ratio.
- For GPU to run, it generates lot of heat which needs an AC unit to cool it. An investor has to run the AC till the room is at desired temperature. Henceforth first to run the GPU and then the AC double the amount of electricity bill.
- Ethereum value plays a major role in regulating profits from mining. When Ethereum was increasing from $730 to $4,000 in May, it was easier for miners to regulate profit but when the value is within the range or bearish, miners go in haywire.
- Mining difficulty comes into action when it is hard to find the next block to add to the chain. A higher difficulty rate will decrease the total income, but it can be decreased if mining profits are not at the peak and the number of people mining decreases.
- After an update of EIP – 1559, its purpose is to reconstruct the way of transaction fees work which will in return reduce the mining profits. Also, an update of Ethereum will lead to less profit for miners.
In the present scenario, mining Ethereum is not a good idea. More focus should be on to the trading of Ethereum. The ongoing network hash rate to mine one Ethereum is nearly 400 TH/s (total hash rate per second) or 400MH/s (million hash rate per second).
Let’s say we own one 100RTX 3080 GPU’s and try to mine an Ethereum, then it would take about 615 days at current rates.
Approximately every fifteen seconds a block is added to the Ethereum, which gets to a rough total of 5,750 blocks each day.
Why Investing is better than the mining of Ethereum?
The two main reasons behind this are as follows:
- With the upgrading of Ethereum, the EIP-1559 will reduce the number of transaction fees which will result in the burning of Ether. The main focus will be on setting a fixed value for the users and increasing the security of the system.
Previously, the amount rewarded to the miners was the demand of the chains generated per day. The higher the number of traders, the higher is the profit of the miners. Today, miners are printing money as the fees were huge in dollars per trade.
But when this update will be levied, the cut-price will be set for the miners beyond which the users will not be able to claim the amount. Henceforth, minting huge profits will not be easy for the traders to capture.
- Another reason being the up-gradation of the Ethereum platform from the basic phase to phase 2 (ETH 2) which is heading to Proof of stake. People financing their coins can opt for both the options of mining secretly and forks of the blockchain. But now it is like mining is not worth doing it.
Factors for mining of Ethereum?
Before the merging, mining was profitable but EIP-1559 update adds a lot of unpredictable moves. However, the current market is dipping from the high it seems that Ethereum burning will help in preserving the mining gains. But, after the merge, the mining will not be possible anymore. Miners will have to exchange the coins or sell the extra graphics card units.
Bull run of the Ethereum-
After studying the various crypto charts, it seems that market is going to dip further. It does not seem to me that this market will repeat the history of past bull runs.
Comparing Ethereum from the history it has set an image with major changes in speed and efficiency. More coins and DeFi organisations have come up when compared with the past ones.
While, major core team is working on the latest updates issues to bring back it to same track. Transaction fees should be reduced which will be helpful for the miners to predict the volatility.
After the upgradation, the network should get faster and should reduce the consumption of electricity. It will be profitable bet for the miners if Ethereum can use approximately zero power to generate one coin.
Thinking of another option mining-
Ravencoin and Firo are the other options to earn which are of equal to Ethereum as after proof of stake it will be difficult to mine it. Due to high hash power required for mining Ethereum is more than the other coins. When maximum number of miners will move to other coins then the hash power will increase making it difficult for Ethereum to mine.
Ethereum is no doubt the top most currency to mine owing to its rapid growth, mining of new coins in the market and decentralised exchanges.
I hope this article has helped you to overcome some queries about mining Ethereum. Though mining will be less profitable in future after the updates. Hence, one should consider all the pros and cons before stepping into this world of mining cryptocurrencies. One should regularly update with the latest news on mining so that it is helpful for you in future.