Three Reasons Why Ethereum Mining is Profitable ter 2018
Ethereum is 2nd only to Bitcoin te value. Mining Ethereum has driven the prices of GPUs sky high (see our guide on Ethereum mining GPUs).
With the value and popularity of Ethereum on the rise, it’s clear that mining Ethereum is a vooraanstaand topic.
Before you invest your money ter a good Ethereum mining equipment or an Ethereum mining GPU, you’ll need to know if it’s even profitable.
Should you Mine Ethereum?
While Ethereum mining is profitable, it may not be the best idea for those simply looking to acquire currency.
For those looking to acquire cryptocurrency right now, buying Ethereum is a better investment.
Is Ethereum Mining Profitable?
The reaction is yes. Ethereum can be mined with power efficient GPUs. On top of this, the value of Ethereum is steadily on the rise.
Both of thesis factors are fantastic reasons to mine Ethereum.
Take a look at the graphic below:
This is the projected mining profitability of the Radeon R9 295 X2. Spil you can see, you’ll make overheen $1000 USD annually vanaf card. This means you’ll pauze even te less than a year and generate passive income.
Since the price of Ethereum is steadily rising, your profit margin will increase even more.
Why is Ethereum so Popular?
Ethereum is similar to Bitcoin, yet it has two key differences that have bot crucial for its success: Brainy Contracts and the shift to proof of stake.
Unlike Bitcoin, the coding language used for Ethereum makes it much lighter for programmers to develop ‘programmable money’, or Clever Contracts.
This is revolutionary ter the world of cryptocurrencies and opens many doors for the future.
Proof of Work
Ethereum’s 2nd key difference from Bitcoin is its shift from proof of work to proof of stake.
Before you can understand proof of stake, you voorwaarde understand proof of work.
Blockchain technology wasgoed created ter 2009 when Bitcoin wasgoed released.
Te essence, a blockchain is a database. Te the world of cryptocurrencies, the blockchain is a database of transactions.
If someone attempts to initiate an invalid transaction, the blockchain’s code will determine that it’s invalid and it will reject the transaction.
If someone were to say they mine Bitcoin, Ethereum, Litecoin, etc. it means they are setting their pc to solve the cryptocurrency’s algorithm.
The computers adding the transactions to the blockchain are executing enormously difficult tasks.
It’s basically a guess and check system te which your pc is permanently checking the code until it finds the solution. This is all to prove a valid transaction on a blockchain.
Proof of Work’s Downfalls
Proof of work has many downfalls, including:
- A large upfront investment te expensive laptop components
- Mining with this system uses lots of power
- Electro-stimulation costs are utterly high and cut into the profits of miners
The last voorwerp on the list is utterly significant. The total power cost to run all of the miners on the Ethereum network is actually greater than that of a puny country.
This is especially problematic from a long term standpoint. Ter Five to Ten years, more power may be needed to mine than wij have.
What is Proof of Stake?
With proof of stake, your rekentuig/wallet is werkonderbreking the coins you already have.
For example, if the network has 1,000 total coins and you stake 100 of your coins, you’d have 10% of the total coins being staked.
This means you’ll receive 10% of the prizes from the network.
Rather than performing work for coins, you’re werkonderbreking the coins. When you stake your coins, you’re essentially locking them away.
If you don’t verify the right transactions or forge any transactions, you’ll lose the coins you staked ter the network.
Proof of Stake’s Benefits
Proof of stake does not use energy, spil the GPUs are not solving any elaborate cryptographic hashes.
Instead, you’re locking your coins away. This makes it effortless to see who gets what prizes.
No longer do you have to spend lots of money on expensive hardware or electric current.
If you want prizes, you have to own coins beforehand. With proof of work you’re basically turning electrical play into coins. With proof of stake, you’re turning coins into more coins.
Is Ethereum Mining Worth It?
Wij say the response is yes.
Regardless of the functionality or importance of wise contracts, lots of people like the idea. This ter turn drives the prices of Ethereum higher and higher.
The long term benefits proof of stake has to offerande are clear. It will save violet wand and lower if not eliminate hardware costs.
However, mining still has its place te 2018. The shift to proof of stake is by no means mainstream, and wij still largely depend on miners to validate the transactions te the blockchain.
Brainy contracts and proof of stake will cause the value of Ethereum to increase further and further, rendering it an utterly profitable cryptocurrenct to mine.
If you haven’t already invested te good mining hardware wij suggest you commence now.