Ethereum Miners Raked in Nearly $300 Million Last Month as Hashrate Breaks New Highs
Can you imagine the speed required to make 250 trillion attempts to solve a puzzle in one second? Stop imagining! We already have the answer figured out for you!
On 6th October 2020, the Ethereum-mining hash rate made a new record by reaching a figure of 250 trillione hashes per second. Ether miners are more active than ever before, and the Ethereum network is now more powerful than ever before.
To your surprise, Ethereum is not a mineral found in the mountains. Miners have made $300 million without even stepping outside their homes. Without confusing you any further, let me explain how ETH mining can make you a millionaire.
What is Ethereum?
It is a platform that makes use of a blockchain database to allow developers to create applications on it. The apps that are built on Ethereum are decentralized; Any computer that connects to the Ethereum network can access these apps. You can make online payments, trade cryptocurrency, and sell products without the involvement of third parties like banks.
Ether (ETH) is Ethereum’s cryptocurrency that has $40 billion worth of market capitalization in 2020.
What is Hashrate?
It indicates the overall health or power of the Ethereum network. The combined computing power of all the mining machines is directly proportional to the hash rate; When power increases, the hash rate goes up. This means that the miners play a vital role in strengthening the cryptocurrency network.
Initially, low-power machines were used, but as the popularity of the network grew, more users jumped in, and more powerful mining rigs were introduced. This caused the hash rate to reach trillion hashes per second and enhanced the network’s security.
What is the hype all about? How are the hash rate and mining rigs related to money? Let us find out!
What are the Mining Rigs?
People spend thousands of dollars on building powerful mining rigs that can generate more ETH in less time.
Mining rigs are basically computers with an extremely powerful graphics processing unit. Application-Specific Integrated Circuits have now been introduced for mining purposes. Mining is not an easy task, so it requires a lot of energy in the form of electricity.
The main reason behind using GPUs and ASIC instead of simple CPUs is to lower energy consumption.
Components of a Mining Rig
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Power Supply Unit
The capacity of the supply unit (in watts) must be greater than the total power consumption of all the units of your rig. If you have 4 GPUs that consume a total of 800 watts and other units consume 200 watts, a supply unit of at least 1000 watts is needed for the smooth working of the rig.
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Hard Drive
Your SSD requirement depends on the operating system of your rig. A 120 GB hard drive is required for mining rigs that run windows. For Linux users, 60 GB SSD would get the job done.
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Motherboard
The number of PCIe slot connectors in a motherboard corresponds to the number of GPUs that can be installed. ASRock H110 Pro BTC+, Asus B250 Mining Expert, and Gigabyte GA-H110-D3A are some of the best motherboards for mining. The average cost of these motherboards is around £110.
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RAM
Your rig’s processing speed depends on the size of its RAM. At least 4GB RAM is required for fast calculations.
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GPU
GPUs are the actual driving force in a rig, so make sure that you have plenty of them. GeForce GTX 1060, RTX 2080 Ti, and RX Vega 56 are some of the most popular graphics cards on the market.
Let me link all the dots here!
The Role of Mining Rigs
A powerful mining rig can make more attempts at solving puzzles in one second. More attempts mean that there are high chances of working out the right answer. When the right answer is generated, a new block is added to the chain, and the miner gets ETH as a reward. It would not be wrong to say that ETH is sitting in the coaxial cables of your rig.
How Ethereum Mining Generates Money?
Mining is not just about solving the mathematical puzzle but being the first miner to discover or guess the solution is a must for earning a reward. Millions of people are working on the same puzzle at one time, so the processing speed of your rig determines your success rate.
Today, one ETH is worth $467. An ETH miner makes money by processing transactions for the application users on the Ethereum network. ETH is a miner’s reward for solving the complex puzzle. When the miner has processed a certain number of transactions, he/she is rewarded with ETH.
Ethereum serves as the platform for the buying and selling of ETH. Miners’ task is to verify and secure transactions resulting from trading on which they also earn a transaction fee.
One important point to note here is that when the hash rate goes up, the difficulty level of the puzzle also increases to balance it out.
Is Mining Profitable?
Eth miners working with powerful graphics cards can make $15 in 24 hours, which is much higher than the profit in Bitcoin.
High profits do not come solely from ETH mining, but from the transaction fee, which is the main attraction.
The transaction fee in the Ethereum network rose to $11.61 in September 2020, producing millions of dollars in profits. Experts suggest that Ethereum is a good investment as Ether’s price is expected to grow over $2000 by the end of 2025.
Summing It Up!
Cryptocurrency is on the rise these days, and according to the experts, it is the future of online trading. Although there are security issues like double spending and 51% attacks, Ethereum and Bitcoin continue to attract investors.
If you have some extra cash lying in your bank, my advice would be to invest it in buying cryptocurrency. You do not need to go big at this point! Start with 1 token and just analyze its value in the market.
Where do you see the price of 1 Ether going in 2030?
Author Bio:
Myrah Abrar is a computer science graduate with a passion for web development and digital marketing.
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What Early Mining Patterns Tell Us About The Motives Of Bitcoin’s Inventor
The debate about Bitcoin’s inventor, known as Satoshi Nakamoto but otherwise shrouded in mystery, has raged for years. As Bitcoin continues to rise in value, this unknown inventor is presumed to have become a very rich individual indeed. When Satoshi invented Bitcoin, was he driven to profit, mining and hoarding early Bitcoin aiming to accumulate great wealth?
In 2013 first Sergio Demian Lerner presented his research on the early mining patterns Satoshi is presumed to have taken, it revealed around 1 million BTC (now worth around $10bn) hoarded by the creator. For many who see Bitcoin as an anti-establishment currency with an equalizing power, to attribute such vast wealth to Bitcoin’s creator is anathema, undermining the main narrative around Bitcoin and Nakamoto’s original motives. If Nakamoto is as driven by capitalist economics as the nearest banker, is Bitcoin fundamentally different from traditional currencies after all?
Nakamoto’s defenders argued that these 1 million missing Bitcoin were simply forgotten by early miners, and the inventor himself had no such hoard. Indeed, even researching these Bitcoin was taboo. Yet Lerner was unsatisfied with this answer. That’s why he has spent the last seven years unravelling the mining techniques used to unearth these early Bitcoin. What these techniques reveal is that Satoshi (if that is who mined them, Lerner refers to this individual as “Patoshi” to emphasize that we can’t truly know) seems to have been protecting the security of the network rather than pursuing profit after all. The reputation of Bitcoin, and its mysterious inventor, remains intact.
Early Mining Techniques
In order to learn more about the missing Bitcoin – and the individual who mined them – Lerner decided to remine the first 18,000 Bitcoin blocks to see what it revealed. He assumed that these blocks would have been mined with software that was similar, if not identical, to that which came with the first Bitcoin release. This public code was how early miners set about Bitcoins first blocks. The “Patoshi” pattern of how these Bitcoin were mined could ultimately reveal something about the motives of Bitcoin’s inventor, assuming Nakamoto and Patoshi are one and the same.
Through remining these early blocks, Lerner came to a startling discovery. Patoshi’s software was in fact nothing like the software being used by other early Bitcoin miners. Was this Nakamoto giving himself a leg up in the early gold rush of Bitcoin mining? The difference in the mining patterns of the public software and Patoshi’s processes became the keystone of Lerner’s research. Two theories stood out. Firstly, that Patoshi was using an early version of today’s pooled mining processes by combining multiple CPUs. The second theory – seemingly borne out in Lerner’s research – is that Patoshi was multi-threading.
Patoshi’s Multi-Threading
Multi-threading is a hashing technique using intensive computer processing to sweep for multiple nonces (the cryptographic element that Bitcoin miners are searching for) at once, rather than on an individual basis. By rescanning the early blocks, Lerner was able to assess which nonces Patoshi discovered, thus revealing the patterns by which Bitcoin’s inventor was mining blocks. Ultimately, Lerner has demonstrated that Patoshi/Nakamoto was generally finding higher-value nonces thanks to the multi-threading technique, and not because they had superior processing power, but because they had a better process for using their CPU.
Ideology Before Profit
Lerner’s meticulous analysis of the early mining patterns attributed to Bitcoin’s founder reveal that each time Patoshi mined a new block, his miner was turned off for a short interval. If Nakamoto was driven by profit, this is contradictory behaviour as it gives the rest of the community an opportunity to unearth new blocks. Lerner posits that Nakamoto wanted to see fair competition amongst early miners, and distribute Bitcoin equally at the start of the network.
At the same time, Patoshi’s multi-threading would have allowed them to uncover new blocks when they were not being mined by other early users, thus enabling the network to continue ticking over. These patterns have led Lerner to argue forcefully that the security of the network – and not profit – was Nakamoto’s motivation for their early mining patterns.
Still Unknown
It remains an assumption that Patoshi and Nakamoto are one and the same, and the identity of this individual is still unknown. But Lerner’s research strongly indicates that profit was not an early motivator of the Patoshi pattern.
Kristin Herman is a tech enthusiast and a project manager at Essayroo.com and Boomessays.com online writing services. When she takes a break from the screen she likes to curl up with a good book, albeit one about cryptotrends and digital landscapes!
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What Are the Investment Returns on Bitcoin Mining
You know about Bitcoin: The original digital currency based on blockchain. Every transaction is written to a shared ledger and verified by the rest of the network. Each set of approved transactions is a “block” added to the chain.
But you may have missed the buzz on Bitcoin mining. It’s not just for web geeks or digital currency traders. There are thousands of people around the world looking to profit in this way.
What is Bitcoin Mining?
Participants try to guess a random number generated by the system. Those who get the answer “own” the next block of transactions and collect a reward; currently 12.5 bitcoins. If you manage this, you can also collect fees on transactions in the block you created.
This number comes from a complex equation. In the early days it was handled by ordinary computers, and then GPUs (graphics processing units), which were better suited to the task. Over the years the equation has evolved in difficulty to regulate the rate of discovery.
Technology
Bitcoin miners now rely on hardware-intensive systems known as ASICs (Application-Specific Integrated Circuit), which appeared in 2013. If you own or can get access to such a system, you stand to guess a fair amount of numbers on the blocks constantly taking shape.
If this sounds like an easy way to profit, it is. Many people have joined the ranks of digital currency miners. However, with so much competition, the big question is whether there are still decent profits to be made.
Can You Still Make Money?
The more computers that are trying to capture the number, the harder the equation becomes and the fewer numbers you get.
But Bitcoins also tend to go up in value. It was a price spike in 2013 that launched mining as a popular investment option. Speculators agree that the value of Bitcoin should continue rising as its popularity grows.
Investments Required
To maximize your return on Bitcoin mining, you need an ASIC system. These computing solutions utilize high-end hardware that generates a lot of heat. Such a setup requires state-of-the-art cooling and ventilation systems along with higher utility bills to operate all of this.
Without an ASIC of your own, your odds of scoring aren’t good. It is possible to save some money by leasing an ASIC rather than buying one outright.
Other Options
Fortunately for the smaller investor, recent years have seen the rise of cloud mining, or cloud hashing. This response to growing demand is basically another cloud service where you get to lease a portion of someone else’s ASCI-enabled data center.
A cheaper option, albeit with smaller potential rewards, is a mining pool. This is a third-party service that uses investor funds to do their own mining and shares out the profits. The upside of this is that you don’t need technical or financial knowledge at all; you just need to come up the minimum investment required by the service.
Profit Potential
You can join some of these investment pools for as little as $500. Some of these third-party services state that you could earn your investment back in as little as two months or so, and start seeing profit after three. When these claims are legit, or even close to it, you’re seeing a remarkable and fairly consistent ROI better than most forms of investment.
However, transaction fees are currently voluntary on the part of individual users of Bitcoin, as is whether the transaction should even be included in a block. This is encouraged as the transaction is more quickly verified if it’s part of a block. Even so, your profit depends on the current value of Bitcoin, the number and size of transaction fees involved, and the number of people sharing the rewards.
Federal Regulation
In 2015 the Commodity Futures Trading Commission (CFTC) declared that digital currency trading is legal and subject to fair trading laws. However, this doesn’t guarantee that you’re protected. Prudent investors always do the homework: Know who you’re dealing with and determine realistic expectations.
Risks in Bitcoin Mining
The Bitcoin reward is halved every 210,000 blocks, or about four years. As the reward approaches zero, it may not be profitable at all unless transaction fees are increased and enforced. And while the general trend is up, there’s also fluctuation in Bitcoin value.
There’s also a question of integrity. As more cloud services spring up, you’ll have a widely varying scenario of payouts, contract stipulations, and the potential for dishonest reporting; even outright fraud. Also, on the downside: The IRS says that mining profits may be taxed as individual investment gains!
Is Bitcoin mining still a good investment? At the present time, yes, and hopefully for years to come with appropriate changes. Are you ready to sit back and let the computers make you bitcoins?
Jen McKenzie is a writer at Assignyourwriter company (https://assignyourwriter.co.uk/team/jen-mckenzie/) and an independent business consultant from New York. She writes extensively on business, education and human resource topics. When Jennifer is not at her desk working, you can usually find her hiking or taking a road trip with her two dogs. You can reach Jennifer (https://twitter.com/jenmcknzie) @jenmcknzie (https://twitter.com/jenmcknzie)
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| Image Courtesy of Coindesk.com |
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Infographic: What is Bitcoin Mining?
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