Is mining Ethereum still worth it?
When it comes to most cryptocurrencies, the mining difficulty and, by extension, the costs associated with it are only going upwards. However, as you can see in the chart below, Ethereum mining difficulty dropped by 50 percent in October 2017. This is most likely due to the reward decreasing from five ETH per block to three ETH.
However, the mining difficulty seems to be steadily regaining its positions. As more and more miners join in the process, it will only become increasingly difficult and costly. But, Ethereum’s value is steadily increasing and will most likely continue to do so, thus making mining potentially worthwhile in the long term.
Nonetheless, big changes are coming to the Ethereum network. Sometime in the foreseeable future, the team behind it is planning to ditch its proof of work algorithm and instead adopt a ‘proof of stake’ framework. Once this happens, the network will no longer need miners to secure and confirm the transaction, as this will be done by token owners. The creators of new tokens will be chosen in a deterministic way, depending on their wealth, which is also defined as a stake. Most importantly, miners will no longer receive block rewards, only collecting the transaction fees. The recent drop in the Ethereum block difficulty is often explained by the decrease of the reward amount to three ETH and, perhaps, it was done in preparation for the inevitable transition to a new algorithm.
The update will come in the form of a hard fork, once again splitting the network into two. So, those who wish to continue mining for rewards might be able to do so on the old version of Ethereum. With no fixed date for the update, it’s really hard to predict how profitable getting into mining at this point can become.
0 Comments