According to the analytical platform Glassnode, on February 5, Ethereum miners earned the equivalent of $ 3.5 million in just one hour. Among the main reasons for the high jump in mining profitability are the rapid growth of the ETH price over the past few months. We understand the situation in more detail.
After a prolonged decline in the cryptocurrency market and the fall of the hype around the mining of digital assets, Ethereum finally pleases its “miners” with new records.
According to tradition, we will start with an explanation. The income of Ethereum miners consists of two components — a reward for a block of cryptocurrency found and a bonus in the form of commissions for conducting transactions. The reward for the block is fixed and currently amounts to 2 ETH. Plus, the owners of video cards receive commissions that ordinary users pay for conducting transactions. This indicator is unlimited and can significantly exceed the already mentioned 2 ethers.
Since transactions with the largest commission are carried out first, users are interested in increasing it in order to bypass the general queue and jump on the outgoing train with their transaction. This auction system provokes a general increase in the cost of transfers that are sent to miners.
We have clarified the latest data: today, Ethereum is the most profitable cryptocurrency for mining. According to the 2CryptoCalc calculator, one video card of the Nvidia GeForce GTX 1070 Ti model today earns about $ 3.4 per day on ETH, excluding electricity costs. For a month, the income will exceed the level of $ 100, and if the Ethereum exchange rate rises, the dollar equivalent of profit will be even greater.
Ethereum mining is now of great interest for miners. For example, more than 13 thousand people mine cryptocurrency on the 2Miners pool. If you are looking for the most profitable miner for ETH mining, read our article “Comparison of the best Ethereum miners for Nvidia and AMD video cards”.
Is it worth mining Ethereum
According to the Coingecko platform, Ethereum reached a new historical high on Friday, approaching the $ 1,752 mark. In the graph below, the price growth is shown in parallel with the volume of income of ETH miners. He also reached a historical record on the same day.
Moreover, in the “most profitable” hour of the fifth of February, the miners managed to get more than $ 3.5 million in revenue. Such figures have never been recorded before, Decrypt reports.
The day before-on February 4-miners earned more than $ 53 million in 24 hours. This is almost 10 million more than the day before. For comparison: on February 1, miners managed to earn “only” $ 29 million.
Note that although high commissions are a profitable factor for miners, other users of the Ethereum network suffer losses because of this. The increase in fees for transactions with smart contracts and the transfer of ETH only slows down the development of the ecosystem, lowering the entry threshold for using cryptocurrency.
That is, now it is hardly worth waiting for the influx of new users into the industry, since during the recent peak, even a normal transaction on the Ethereum network cost the equivalent of $ 25. Naturally, this feature will only frighten many beginners.
On the fifth of February, it was really necessary to pay an average of $ 25 for a transfer on the ETH network. And this is a record of this indicator — transactions have never been so expensive before.
However, it is worth noting here that users continue to conduct transactions and swaps, even despite the incredible cost of interacting with the blockchain. This means that the prospects of Ethereum significantly outweigh the difficulties in the form of high commissions. So the version of the ETH haters that the sky-high price of gas will destroy the cryptocurrency project has already failed.
Let’s move on to the second historical record of altcoin — the number of transactions in the cryptocurrency network per day. According to the Etherscan blockchain observer, on February 6, the anniversary billion-dollar transaction was carried out on the Ethereum network. By contrast, in January 2018, when the cryptocurrency reached its historical maximum during the previous run up, the Ethereum network processed about a million transactions per day.
However, after the growing market gave way to a collapse, the daily volume of transactions decreased and ranged on average from 500 thousand to a million units. Since June 2020, the number of daily transactions has constantly exceeded the million mark, which was caused by the rapid development of DeFi protocols based on the Ethereum blockchain.
For example, projects in the field of decentralized finance such as Aave and Uniswap allow traders to earn interest on their assets and exchange crypto on a decentralized basis. And the opportunities of the new industry do not end there.
We believe that the record growth of commissions in the Ethereum network is a compliment for this blockchain. It means that users see a huge value in the network and are ready to use it in any conditions — including increased load.
Note that the developers are working on reducing commissions in the network. In particular, they plan to reduce the cost of interaction with the network in the equivalent of gas, which is why ordinary transfers should be cheaper. By the way, transactions are not particularly expensive now: for a quick transaction, it is recommended to estimate the gas at 113 gwei. Last week, this indicator also exceeded the level of 450 gwei.
Decentralized finance has become the main incentive for the rapid loading of the Ethereum blockchain, significantly increasing the profitability of altcoin mining.