As the cryptocurrency boom wanes, miners are scrambling to get the most out of their investments. Using graphics cards aimed at gamers, these folks have extracted a pretty penny from Ethereum and other networks using GPUs to mine expensive coins. Both Bitcoin and Ethereum take advantage of the proof-of-work method in which miners play a vital role in producing new blocks of virtual currency.
Proof of work is essentially a group of computers competing to solve a complex mathematical equation. Whoever solves it first receives a fee that essentially matches what is “mined”. However, this process is very energy intensive, as you may have heard, and therefore harmful to the environment. mining farms are online 24/7burning a large amount of energy.
Of course, there is a catch. Gaming graphics cards used for mining are quite expensive, costing up to $2,000 in the retail market. This means that miners spend a good portion of their time mining to recoup investment costs. According to Bitpro Consulting, Ethereum miners have spent up to $15 billion on graphics cards (mining equipment).
With the decline in Ethereum prices, miners began to see a sharp drop in revenue, with many even struggling to recoup investment costs. The imminent move to Ethereum 2.0 will further reduce the fees offered to miners, essentially making mining unprofitable. However, mining enthusiasts are convinced that this will not happen anytime soon. According to Aydin Kilic, COO at Hive, an industrial Ethereum miner, the chances of this happening transition that occurs this year are only 1 to 10%.
Regardless, the the number of active users mining Ethereum increased by 70%, says Slava Karpenko, the CTO of 2Miners, an organization that helps small miners pool their resources to support Ethereum. After the merger with Ethereum 2.0, the machines of miners will still be able to mine other less popular coins such as Raven, Grin, Dash, Monero, and ZCoin. Although these currencies are less profitable than Ether, they will still pay the bills.