The Ethereum Gas fee has dropped by 93%, but miners are buying mining machines frantically?

Editor's Note: This article comes fromBabbitt Information (ID: bitcoin8btc), author: Wang Jiajian, published with authorization.

Editor's Note: This article comes from

Babbitt Information (ID: bitcoin8btc)

On the 12th, a piece of news was reported by the blockchain media in turn, that is, the price of Ethereum Gas dropped to 36Gwei, which is the lowest value in 3 months since DeFi exploded, and it has fallen 93% from the high point.

Does this mean that DeFi is completely cool and the story of Ethereum has come to an end? Judging from the data on the chain, this is not the case at all. The computing power of Ethereum continues to grow, and the news from the miners shows that they are crazily increasing...

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Ethereum computing power, a year-on-year increase of 100%

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The data comes from QKL123, the blue line is the average computing power of the entire network, and the yellow line is the ETH price

According to the data provided by QKL123, the average computing power of the entire Ethereum network reached a historical high of 295T on August 9, 2018, and then the computing power began to decline. In January 2020, the data started to rise slowly from 128T. After July, the data began to rise rapidly. Today, the average computing power of the entire network is 260T. Overall, in 2020, the computing power of Ethereum has increased by about 100%.

The acceleration in July is easy to understand. In June, Compound launched the liquidity mining method. After that, YFI, YAM, SUSHI and UNI started a new wave of DeFi, which not only made the price of ETH rise to 3313 yuan The high point of the year, its on-chain handling fee has also skyrocketed, and the income of miners has soared. This naturally drives the enthusiasm of Ethereum miners to buy mining machines and enter the market for mining.

Now, what we need to observe is whether the computing power will continue to rise? Looking at the graph above carefully, it will be very interesting to combine the two broken lines of Ethereum price and computing power.

First, on January 14, 2018, the price of Ethereum reached a historical high of about 8,900 RMB. However, in the following 8 months, the average computing power of Ethereum reached the highest in history, and at this time the price of ETH was only 2558 yuan, which was about 71% lower than the high point.

Secondly, compared with the historical value of Ethereum's computing power reaching today's value, the price of ETH has not changed much. In other words, if only from the perspective of computing power, the income of miners today is similar to the income at the highest point of computing power in history.

It would be interesting to compare Bitcoin with the same data. First of all, the high point of the average computing power of the entire Bitcoin network also lags behind the high point of the price. According to the data, before this, the average computing power of the entire network began to decline after 10 months. But it quickly turned to rise again. On a larger time scale, Bitcoin's computing power seems to have been rising. Today, this data has reached a historical high of about 140E.

That is to say, compared with a year ago, the price of Bitcoin has not changed, but the income of miners has theoretically decreased by about 50%.

This explains the very different living environment of today's Bitcoin miners and Ethereum miners. Ethereum miners eat meat and drink heavily, while Bitcoin miners can only drink soup, and the competition for computing power is becoming more and more fierce.

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DeFi pulls back, ETH falls, and Ethereum miners are increasing their positions!

Entering October, all DeFi-related cryptocurrencies have seen a correction. Data shows that in the past month, the total market value of DeFi has dropped by 15%, and the prices of more tokens have been cut in half. The Ethereum Gas fee has also dropped from the high point, almost at 36Gwei, which has dropped by 93% compared to the historical high of 545Gwei.

However, from the perspective of computing power, miners are continuing to increase their stakes, and, judging from the above data, it is speculated that this increase in computing power is likely to continue.

Yao Binbin, the founder of Frontier Mine, told Babbitt: "I think the future computing power must be long, and it will rise steadily. The graphics card market is no longer a simple retail market. It is the same as the Bitcoin market in 2018. A large amount of capital goes to Get inside. For retail investors, I think there is still an opportunity now, and there will be no chance after a while."

Wu Junjie, the brand director of Bishide, also said that they have recently deployed a batch of Ethereum mining machines and sold a lot of new machines (own brand). "However, graphics cards are out of stock now, and many miners cannot buy graphics cards." He said.

Recently, Nvidia launched the latest RTX 30 series graphics cards. Preliminary test data shows that the computing power of RTX 3080 and 3090 is stable between 90 MH/s and 115 MH/s. Using this data to compare with the top graphics cards in the current market, there is about 2 times the advantage. Ethereum miners are quite concerned. What impact will these graphics cards have on the market?

Yao Binbin said that they learned from manufacturers and agents that the output is very small, so he does not think it will have any impact on market computing power. In his opinion, the new computing power of Ethereum mainly comes from the RX5700 of AMD. "There are more A cards, including 578, 588, and 598. Among them, 598 is the main force of this series. In recent months, the output of N cards is very small, mainly because the inventory of A cards is relatively large."

Zhang Songqing, founder of MinerOS, also said: “Current changes in computing power mainly depend on the currency price and the production capacity of manufacturers. If AMD6 series graphics cards and Nvidia 30 series graphics cards are mass-produced under the current currency price, the willingness of graphics card miners to process machines is still Pretty strong."