As the cryptocurrency boom fades away, miners are scrambling to get as much out of their investments as possible. Using graphics cards meant for gamers, these folks have extracted a pretty penny from Ethereum and other networks using GPUs for mining pricey coins. Both Bitcoin and Ethereum leverage the proof-of-work method wherein miners play a critical role in producing new blocks of the virtual currency.
Proof-of-work is essentially a bunch of computers competing to solve a complex mathematical equation. Whoever solves it first, gets a fee which is essentially what is “mined”. However, this process is very power-intensive as you might have heard, and therefore harmful to the environment as mining farms are online 24*7, burning a large amount of energy.
Of course, there’s a catch. Gaming graphics cards employed for mining are quite expensive, costing as much as $2,000 in the retail market. This means that miners spend a good chunk of time mining to recoup investment costs. According to Bitpro Consulting, Ethereum miners have spent as much as $15 billion on graphics cards (mining equipment).
With Ethereum prices dropping, miners have started seeing a steep drop in revenues, with many even finding it hard to recoup investment costs. The impending shift to Ethereum 2.0 will further cut the fees offered to miners, essentially making mining unprofitable. However, mining enthusiasts are convinced that this won’t happen anytime soon. According to Aydin Kilic, chief operating officer at Hive, an industrial Ethereum miner, the odds of this transition happening this year are just 1-10%.
Regardless, the number of active users mining Ethereum has increased by 70%, states Slava Karpenko, the CTO of 2Miners, an organization that helps smaller miners pool their resources to support Ethereum. After the merge to Ethereum 2.0, the machines of miners will still be capable of mining other less popular coins such as Raven, Grin, Dash, Monero, and ZCoin. Although these currencies will be less profitable than Ether, they’ll still pay the bills.
