Ethereum is currently the third largest cryptocurrency by market cap after Bitcoin and Ripple. While the cryptocurrency has undergone cascading price dips since its all-time high in January 2018, this does not erode the benefits that come with mining ETH.
Before you embark on mining any cryptocurrency, you need to consider the prevailing cost, as this could help determine whether mining the asset would be a profitable venture. In the case of Ethereum, the cryptocurrency has increased in value several times after its inception. However, it is advisable to look at the current cost of the cryptocurrency.
What is Ethereum mining?
One of the important aspects of ETH mining is the verification of transactions. By the process of mining, you lend the processing power of your mining rig to verify the transactions.
Nevertheless, is it still worth it to mine Ethereum in 2018/2019? Read on to find out.
With powerful GPUs, it is still possible to mine Ethereum. Even with the price dips witnessed in 2018, crypto space enthusiasts and influencers are still hopeful that the value of the cryptocurrency will increase, making it profitable to mine in 2018. Ethereum is a popular cryptocurrency with many similarities to bitcoin. However, two main differences exist between them: Proof-of-Stake and Smart Contracts.
Ethereum uses coding language, which enables programmers and developers to create smart contracts. A smart contract is a revolutionary feature in cryptocurrency and presents a bright future for digital money.
The Proof-of-Stake feature enables users to stake the coins they possess through their wallets or computers. For example, if you stake 100 coins in a network with 1000 coins, you can have 10% of the staked coins. This can earn you 10% mining rewards from the Ethereum network. This method could help you stake coins without actually mining them. It’s only important that you confirm whether the transactions are correct. In case you enter a wrong transaction or forge a transaction, you stand to lose all your staked coins.
How do you benefit from the Proof-of-Stake protocol?
Proof-of-Stake mining doesn’t consume much energy. Besides, it gives you the opportunity to lock your coins and make them secure. Eventually, you will get to earn rewards even without investing in electricity or expensive hardware.
To claim your mining rewards, you simply need to own some coins previously. Unlike in Proof-of-Work (PoW) in which you actually use electricity and hardware to earn coins, the Proof-of-Stake mining enables you to transform coins into more coins.
Before mining on Ethereum network
The following are various factors to consider before you begin mining on the Ethereum network.
Level of mining difficulty
To earn the Ether (ETH) cryptocurrency on the Ethereum network, you have to own a mining rig or hardware that solves complex mathematical problems. The mining difficulty of the network determines the level of difficulty in solving the complex mathematical problems. When the level of difficulty is higher, you end up with less Ether, which could be because of more miners joining the network.
Hash rate refers to the speed at which a mining hardware or rig operates, which enables it to solve the complex mathematical equations. In the end, a mining hardware or rig takes more or less time to confirm a transaction. As more miners join the market, new mining machines also join the market. However, the machines with high hashing power are equally expensive. Besides, such machines consume more energy, making it difficult for everyone to afford.
Each mining rig or hardware is different in terms of the amount energy it consumes and the efficiency level. A standard mining rig can consume 100W at maximum load. Powerful miners with higher hashing rates can go up to 1000W.
With the shift to the Proof-of-Stake protocol, the Ethereum network is able to verify transactions, making it easier for users on the network to stake coins. Ethereum network also offers various mining options. In addition to using GPUs, users can equally join a mining pool at affordable prices.
Many reliable companies offer this service and all a user has to do is sign up on the website and create an account. Once the account is up and running, the user can start mining Ether (ETH). The Proof-of-Stake comes with various benefits such as reduced electricity and hardware cost.
With all the factors considered, it is safe to say that Ethereum mining in 2018/19 is still profitable. With useful features that sustain existing miners and attract new ones, the price of ETH is expected to rise, regardless of the corrections experienced in 2018. By using the blockchain to validate transactions on the network, the addition of PoS and the inclusion of smart contracts, Ether (ETH) still remains a profitable cryptocurrency to mine.
Disclaimer: This article is not a direct guide for trading or investment in cryptocurrency. Do your research and consult a financial expert before you invest in cryptocurrency.