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800k/hour for Ethereum Miners

Ethereum miners making money

October 2, 2020 | 

JOHN K MWANIKI |  0 Comments| 

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Ethereum miners are having some of the biggest paydays. They are earning more than $800k in an hour. The data, according to Glassnode, shows an improvement from the previous $500k.

The data company announced this in one of its tweets. It tweeted, "Average Ethereum miner revenue from fees surged $800,000 per hour (!) in the past 24 hours."

The new miner earnings are some of the highest ever in the coin's history. It is also noticeable from the analysis that miners at one point it reached the $900k per hour earnings. 

The increase in earnings is due to increasing transaction fees. Glassnode reports that the miners brought in $16.5million in the transaction. This is way above the $8.1million realized a few days earlier. 

The doubling of the fees within a day shows the case for the rising miners' earnings. These are high figures in the Ethereum transaction fees history. They have traditionally ranged around $140000 to $2 million. 

These transaction fees top the highest ever experienced during the 2017 cryptocurrency boom.

While the miners are having a field day with the high returns, users and experts are becoming concerned. The transaction fees are becoming too much for regular users.  

Is Ethereum Mining Worth it?

How lucrative mining is, determines its attractiveness. Crypto mining has grown over the years. As mining becomes widespread, the costs and difficulty move upwards.

Ethereum has kept its place as the second most valuable crypto-currency. For that, it has been attracting miners. The increase in miner block rewards is likely to lure even more users. It will require more computing power and software to gain the coins. The mining machines have become more powerful and energy-intensive. 

The increase in costs has coincided with the token's value increase. The coin has gained value for some time. It means the miners can still cover costs and make profits. The only concern will be if the digital asset goes on a sudden bearish move. 

Still, there are other ways to participate in Ethereum other than necessarily mining. The options include Ethereum staking and Ethereum faucets

Ethereum Price Outlook

Ethereum has been the best performing asset class in 2020. It has been on a bullish run through the third quarter of the year. 

The growth is because of the expansion of the DeFi protocol

There has been an unprecedented run for the DeFi coins. The decentralized financial sector has tripled within the duration. Ethereum is the leading gainer as the DeFi projects run atop the virtual currency blockchain. The development has fueled the token prices for some time.

Still, there are concerns if the bullish run will stay for the foreseeable future. It has already stalled due to the changes in Bitcoin. Ethereum relates to BTC such that a slowdown affects both. After a period of increase, Bitcoin is making a stop in terms of value.

Bitcoin has reduced from $12k to $10k. The same volatility is present in Ethereum, with the coin moving from $480 to $338. 

Cointelegraph also reports a market correction. It states the crypto market is on a correction, and Ether is part of the underlying tokens. The coin is likely to go on a sustained bearish run. It is already below the historical resistance levels of $385 – 395. There is a possibility of it hitting $250. 

The increased miner earnings have come with considerable pressure. On-chain metrics of the network demonstrate concentrated activity. The increasing demand for the Ethereum network is too much for tokens. It has seen the DeFi go on a decline in past weeks. 

The DeFi coins devalued by around 40% in the past week. Ethereum will decline until the market corrects fully.

The Future of Ethereum Mining 

Even though Ethereum is lucrative, it might not stay as such in the future. The coin is in the advanced stages of introducing the Ethereum 2.0 version. The new platform will abandon the proof-of-work (PoW) validation for the proof-of-stake (PoS). The miners would not have a significant role in the decentralized protocol.

One of the major options for the miners would be to move to mine other altcoins. Ethereum mining GPUs are multipurpose. They can mine a wide variety of altcoins like Litecoins. This is different from Bitcoin mining ASIC machines that are coin-specific. 

The Ethereum miners could move to other coins without having to purchase new machines. The other option for the miners would be to sell the devices and buy more tokens. The PoS works such that validation depends on the coins one owns. Traders holding a lot of currency would gain more. 

The PoS comes with various benefits. It comes with faster transactions due to ease of validation. It also comes with low energy consumption, unlike mining, which is power-intensive. The profitability, still, might take some time to verify. 

Don't fret yet. The movement from the PoW to PoS will be gradual. The miners will stay around during a transition before the eventual phase-out. 

Final Thoughts 

The Ethereum network is experiencing one of the busiest periods in its history. 

The coin has accommodated the expanding DeFi protocols leading to massive value improvement. The period has seen the miners gain more than any other group. 

After first hitting the rewards of $500k per hour, they are now at $800k. These are huge numbers for the industry. Not even the bitcoin miners make such gains. 

The industry is, however, headed on a correction. The DeFi and the other coins markets are realigning. 

It signifies a bearish run for the crypto market. The value of the miners' gain is also likely to go down as the pressure on the protocol reduces. 

A decline mining reward is good news for crypto users. Miners gaining much means the users have to pay more in transaction fees. For now, they will have to pay more while waiting for the market changes. If the miner finds the venture not profitable after some time, they would consider staking or the faucets.

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