Can investing in Ethereum mining currently make money?
Recently, DeFi applications in the Ethereum ecosystem have continued to heat up, and related tokens have also become popular investment targets. The prices of many tokens have reached new highs. Recently, the price of Compound token, a popular project, has surpassed that of Ethereum.
This wave of DeFi boom has brought the attention of many friends in the circle to Ethereum. I also emphasized in the article that our focus in the future should be on Ethereum. With the increasing attention of Ethereum, not only DeFi, but also other things related to Ethereum have begun to attract attention-mining is one of them.
Speaking of mining, people in the circle, especially many well-known seniors, talk about Bitcoin mining the most. Compared with Bitcoin, there are much fewer introduction articles on Ethereum mining on the market.
Ethereum mining uses the same mining machine as Bitcoin, and its consensus mechanism is also POW, so Ethereum mining is also a competition of computing power. But different from Bitcoin, in order to prevent Ethereum mining from being monopolized by ASIC mining machines like Bitcoin mining, the Ethereum team added some special processing to the mining algorithm to prevent mining from becoming a simple algorithm. Competition. And it is this detail change that leads to a completely different method of mining Ethereum and Bitcoin mining, and also uses completely different equipment.
Bitcoin mining must use a dedicated ASIC mining machine, and this mining machine is almost monopolized by the four major mining machine companies (Bitmain, Whatsminer, Canaan and Ebang International). There is no need to use a special ASIC mining machine for Ethereum mining, and it can be mined with a graphics card.
So why do Ethereum mining machines use graphics cards for mining? The reason is that a special processing is added to the mining algorithm of Ethereum, so that miners need to maintain a directed acyclic graph (DAG) data structure in the system when mining, and the calculation and storage of this data structure You have to rely on the graphics card.
Unfortunately, Ethereum mining has come this year, and the data structure of this directed acyclic graph has become larger and larger, so the graphics card storage space it occupies is also increasing, and will reach 4G space in the second half of this year . This makes the 4G graphics cards configured in quite a number of old-fashioned mining machines will soon be unable to be used for mining and will be eliminated. Therefore, Ethereum mining will usher in a huge wave of mining machine replacement in the second half of this year.
According to the information I have, major graphics card mining machine companies are now upgrading the Ethereum mining machines, replacing the graphics card with a configuration of at least 8G.
This is where friends who are going to participate in Ethereum mining need to pay special attention when purchasing mining machines.
In addition to paying attention to the above-mentioned problems in terms of hardware, mining is more important in terms of cost and benefit. Now the configuration of mining equipment is very transparent, so in terms of hardware cost, all information is basically public and relatively fixed.Therefore, the fundamental factors that determine whether mining is profitable are electricity costs and maintenance costs.
When ordinary retail investors participate in mining, they buy mining machines and then directly entrust the equipment to the mine. The mine will charge electricity and monthly maintenance fees. In addition, if the equipment is damaged, the maintenance of the mine also requires participants to pay . All of these are things that retail mining investors should consider carefully before participating.
In 2018, I bought an Ethereum graphics card mining machine for 20,000 RMB. At that time, it was hosted by a certain mining farm, and the electricity fee was 0.3 yuan per degree. In addition, there was a fixed monthly equipment maintenance fee.
I remember that when I bought the mining machine, the price of Ethereum was above $500, and 0.5 Ethereum could be mined every month. However, after a few months, when the price of Ethereum fell below $500, I did my own calculations, and the mined Ethereum was just deducted from electricity and maintenance fees. At this time, when I wanted to sell the mining machine back to the merchant, the recovery price offered by the merchant was almost only one-tenth of the original purchase price.
In addition to the above risks and hidden pits, one more thing to pay attention to when participating in Ethereum mining: With the advancement of Ethereum 2.0, Ethereum will completely switch to Ethereum 2.0 in the next 3 to 4 years, and its consensus mechanism will be From the current POW to POS. Since POS mining does not require too high a hardware configuration, the cost of mining with the current graphics card mining machine will be too high, so graphics card mining is likely to be eliminated in Ethereum 2.0.
Calculated in this way, the time left for Ethereum graphics card mining is estimated to be about 2 years, so friends who participate in Ethereum mining now have to consider how much rate of return mining can bring in these 2 years. If the rate of return is too low, Then it is better to buy coins and hoard coins directly.
