Wednesday, September 22, 2021
HomeNewsEthereum mining: the rally continues!

Ethereum mining: the rally continues!




Uff, lucky again: Miners are happy about relatively small drops in profits. The update “EIP 1559” and the associated update of the transaction fees (gas fees) in the Ethereum blockchain appeared on August 4, 2021. Miners feared this day because part of the gas fees will now be burned instead of going to the miners to go. Ethereum is less inflationary as a currency, but miners’ profits have shrunk by up to 50 percent. The miners’ hardware wallets should actually be much lighter now, but …: The value of Ethereum has increased by almost 40 percent since the update (as of September 1, 2021)! This means that the miners’ profits have in principle remained almost the same. You mine much less Ethereum, but the value of the currency is significantly higher and thus equalizes the losses.

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What are gas fees?

What Makes Ethereum Mining So Profitable? Simple explanation: So far, mining programs determined the transaction fees (gas fees) independently. This is over since August 2021, the update introduces an algorithmically determined basic fee. This is destroyed by the Ethereum protocol after the transaction and the miners look into the tube, because their computing power is theoretically free. To appease the miners, the EIP 1559 update introduced a tip system – the so-called inclusion fee. If you pay more than just the basic fee, you give the miners some coal and in return you can expect your transaction to be completed faster. Anyone who turned off 1 giga-hash power for mining before the update received around one unit of Ethereum every month – today (September 1, 2021) it is only half.

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Gamers breathe easy




What might make some people’s soup too salty, plays into the cards of the other: Gamers are currently getting close to graphics cards at inflated prices, but they are not paying the moon prices that professional scalpers are calling for. They hawked their booty at significantly higher prices, for example on eBay classifieds. This is the end of it, the market has regulated itself according to the supply-and-demand principle. The LHR models (L.ow or L.ite Hash R.ate) from graphics card manufacturer Nvidia have done their part because these cards are of no interest to miners; they have installed a mining brake that is difficult to pry open. Gamers don’t care, because gaming performance is not affected.

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GeForce RTX 3080 Ti Gaming AMP Holo 12GB GDDR6X

Zotac

GeForce RTX 3080 Founders Edition

NVIDIA

ROG-STRIX-RTX2070S-O8G-GAMING (8GB)

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GeForce RTX 3070

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GeForce RTX 2080 Super GAMING X TRIO 8GB GDDR6

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Radeon RX 5700 Red Dragon 8GB GDDR6

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GeForce RTX 2070 SUPER AMP!  Extremes

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ROG-STRIX-GTX1660TI-O6G-GAMING (6GB)

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EIP 3554: A bomb that makes everything more difficult

Another update creates a “bomb atmosphere” – EIP 3554. This is a “Difficulty Bomb”. This is a code that makes the algorithm more complex, so miners get less Ethereum. Miners with relatively poor graphics cards – such as the GTX 1660 Super – are likely to hit the miners particularly hard. The goal: to make Ethereum mining unattractive. Roughly explained, this step is a measure that is intended to initiate the change in ETH 2.0, i.e. the change in the performance record model from the current proof of work to proof of stake. Insiders call this sub-process of change “Ice Age” – it is likely to flood the second-hand market with graphics cards!

ETH 2.0: Proof of Work vs. Proof of Stake

What is Proof of Work anyway? In the “Ethash” algorithm, graphics cards solve puzzles in order to prove their work performance – if that is done, a consensus (agreement), the Proof of Work (PoW), arises. The process described serves to validate and create new blocks that are integrated into the blockchain. The miner receives a reward for solving these puzzles.

Proof of Stake (PoS) is another consensus mechanism. As a reminder: The blockchain records all transactions in individual “blocks”, together the blocks form a chain. The Ethereum blockchain is constantly growing as new transactions are constantly being added. A process is needed to ensure the integrity of the chain and the transactions can be validated.

Proof of Stake basically uses existing blocks from the chain to certify new blocks. In other words: If you have Ethereum on your wallet, you can confirm transactions. A weighted random principle decides which block takes control. Logical: Those who own more Ethereum are more likely to be awarded the transaction validation process. The owner picks up a predetermined transaction fee for this – mining as we know it no longer exists. The advantage of PoS is that the mechanism hardly uses any energy. The proof of stake should be implemented by 2023 at the latest.

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* Our independent experts regularly deal with products and service providers. We will provide you with the resulting articles free of charge. COMPUTER BILD receives a small commission if you click on a link or conclude a contract with a linked provider. Note: The content on computerbild.de is not a specific investment recommendation and only contains general information. Authors, editors and the cited sources are not liable for any losses that may arise through the purchase or sale of the securities or financial products mentioned in the articles. Complex financial products such as CFDs in particular harbor a high level of risk: According to the company, 67 percent of private investor accounts with eToro lose money when they trade CFDs from this provider.


Hasan Sheikh
Hasan, who loves technology and games, is studying Computer Engineering at Delhi JNU. He has been writing technology news since 2016.
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