Ethereum 2.0 Latest Update: Development done before Oct. 15th
I called you 3000 times, but you are still shy about dating me. However, ETH2.0, after year’s waiting, is closer and closer to its finish line.
Yesterday, Ethereum developer and co-founder of Prysmatic Labs, Raul Jordan stated that his team will complete the development of all features of Ethereum 2.0 by October 15. The final features currently being developed by Prysmatic Labs and other software development teams include ensuring that Ethereum 2.0 clients are interoperable and can be used interchangeably by users without the risk of losing validator tokens.
In addition, according to the data from Glassnode, the number of addresses with assets on Ethereum has just reached 47,310,199, a record high. The previous highest record was 47,309,578 earlier today.
It’s hard to ignore the bloom of activities in the Ethereum ecosystem recently. Such activities partly result from the popularity of DeFi. However, you cannot deny that even without DeFi, the Ethereum 2.0 itself has attracted sufficient eyeballs.
Founded over five years ago, the Ethereum platform and its native ether (ETH) have existed mostly in the shadow of bitcoin in the public eye. However, Ethereum has been gathering momentum, particularly in the past few months. In July this year, it was reported that the use of the Ethereum network has surpassed that of bitcoin.
Words are too much to describe the fact that I would like to give out: It’s perfect. time to consider mining ETH.
How to Mine Through Miners?
The Ethereum mining algorithm has higher requirements for memory, which has limited the use of ASIC chips in Ethereum mining to some extent. From the matter of facts, the vast majority of Ethereum miners are based on GPU, which reflects the success of the Ethereum mining algorithm in ASIC resistance. In terms of the absolute value of the computing power, the total computing power of Ethereum is about 200TH/s, and that of Bitcoin is about 120EH/s. The latter is nearly 600,000 times that of the former.
The above comparison is not accurate. Let’s compare from another angle. Suppose you spend ¥10 million each to buy mainstream Bitcoin miners and Ethereum miners and compare the increase in computing power of the two below:
In the above table, the unit of Bitcoin computing power is TH/s, the unit of Ethereum computing power is MH/s, the Bitcoin miner chooses Shenma M31S, and the Ethereum mining machine chooses 5700XT. They are all top-ranked in this year’s sales, which means they are more representative. Both sides invested ¥10 million worth of computing power, and the increase in computing power of the entire network was at the same order of magnitude, with little difference. From this perspective, the “immunity” of Ethereum’s entire network’s computing power to capital is comparable to that of Bitcoin, and the Ethereum network is very robust.
The Current ROI Circle of ETH.
At present, the mainstream GPU manufacturers on the market are AMD and Nvidia. In the Ethereum mining market, the more popular graphics cards are Nvidia’s 1660S, AMD’s 5600XT, and 5700XT.
Based on the graphics cards that can be quoted in the market, we will illustrate the current revenue and payback period of graphics card mining.
According to the current price, the daily net income of the 5700XT 8 card machine is 115.6 RMB. According to the current market price, the static payback period for Ethereum mining is around 240 days, and for the 1660S of the NVIDIA series, the static payback period is only 210 days. This investment is extremely attractive from the perspective of the static ROI cycle.
It should be noted that at present, there are large fluctuations in not only the price of Ethereum but the daily EHT mining output. For example, data shows that 1MH/s can mine 0.00013576ETH today. The result from the above table is based on 1MH in the past 7 days and the payback period is calculated by the average daily output. Of course, the recent surge in miners’ income is mainly due to the popularity of DeFi. We conservatively estimate that the static payback period is about 10 months.
Factors and Risk that May Affect ETH Mining
The static payback period of Ethereum mining is only 10 months or less. There must be some people worry about the risks of Ethereum mining. Let’s take a look at the factors that affect the profitability of Ethereum mining and the potential risks of Ethereum mining.
1. The Total Network Computing Power.
The total network computing power is among the most influential factors that may cause the profit changes of miners.
At present, the actual average block generation time of Ethereum is about 13s with 2 ETH block reward. In addition, about 5% of the blocks are with uncle blocks. The higher the computing power of the entire network, the less unit reward.
In addition to block rewards, the income of Ethereum miners also includes miner fees. Recently, the liquidity mining of Dex such as Uniswap has been popular, which resulted in the skyrocketing of the miners’ fees. In extreme cases, the miner fee for a single block exceeded 4ETH. Of course, such an uncommon high commission is unlikely to last for a long time, but the rise of the DeFi is factually beneficial to increase the commission income of miners.
In the case that system rewards and processing fees are basically guaranteed, the rewards of unit computing power depend on the computing power of the entire network. The computing power of the entire Ethereum network is relatively stable. Since 2019, the computing power of the entire network has fluctuated around 200TH/s.
At present, there is a shortage of GPU on the market, and new graphics cards flowing into the Blockchain fields are even more difficult to find. It is mainly due to the reasons of graphics card manufacturers and the epidemic of COVID-19, resulting in a short-term shortage of graphics cards. If the price of Ethereum and miners’ fees continue to rise, Ethereum’s computing power may increase to a certain extent this year, which is a potential risk for miners.
For new miners, there is a definite benefit point. Ethereum mining needs to store DAG file. This file size will continue to grow with the increase of block height. By December 2020，DAG files will exceed 4G in size. This will cause miners with 4G video memory no longer capable for mining Ethereum. This Batches of graphics cards will need to be replaced or upgraded, which will bring away around 30% of the total computing power on Etheruem Network. That is to say, when the DAG file of Ethereum exceeds 4G, about 30% of the computing power will be withdrawn from the Ethereum network for a period of time. This means that miners with 6G or 8g video memory will be capable to mine more ETHs.
3、Safety Margin & Miner Residual Value
The safety margin can be simply understood as the shutdown price. When the mining revenue is not enough to cover the miner operation and maintenance costs, the price at that time is called the shutdown price. According to the current output, with the annual electricity price of 0.36 rmb /kWh, the energy efficiency ratio of 4J/MH, the current shut-down coin price of a miner is around 380 RMB. Ethereum mining electricity costs are relatively low and has a high safety margin. The Ethereum GPU miners have a higher residual value. After two years of mining, the residual value rate is about 30% of the market price of the graphics card. For Ethereum miners, the residual value of the graphics card is an important part of the income.
We have also witnessed a significant increase in Graphics card prices this year. Graphics cards such as 1660S, 5600XT, and 5700XT have risen by about 30% or even higher, which is also a potential risk for miners.
4. Ethereum 2.0
Some people might worry that the arrival of Ethereum 2.0 will affect Ethereum miners. Ethereum 2.0 is mainly divided into three phases, Phase 0, Phase 1, and Phase 2. Currently, Phase 0 has not yet been launched. It can be conservatively estimated that the Ethereum GPU miners can still be mined for more than one year. Calculated based on the 10-month payback period, and hedged currency output for half a year or even the entire payback period, now is a good time window for Ethereum mining.
5. sum up
· According to the current market situation, the static return period of Ethereum mining is conservatively estimated to be 300 days or even shorter, and the shutdown currency price is less than ¥400 RMB, which has a high safety margin.
· Affected by the GPU manufacturers and the market situation, the supply of new graphics cards to the miners is very limited. In addition, the DAG files of Ethereum will exceed 4G by the end of the year. This will lead to a callback period in the computing power of the entire network, which will help to improve the mining rate fro those new miners (video memory >= 4G) .
· Ethereum 2.0 has not yet started. According to the current progress, it can be conservatively estimated that the Ethereum graphics card mining machine can still mine for more than one year or nearly two years. After the Ethereum is fully converted to PoS mining, the graphics card mining machine can no longer mine Ethereum. In addition, the residual value of the graphics card is also an important part of mining revenue.
All in all, from the current point of view, Ethereum mining is a very good investment option. Considering the fluctuation of the market, it is best to hedge the currency output during the half-year or even the entire static return cycle.
Miner Bootcamp: Cloud Mining
Many people have the intention to make money from mining, but do they have so much time to research mining machines and graphics cards? The answer might be “No”. For such users, they can also choose to use some good mining agents on the market to assist in mining. Agents will provide computing power, and all users need to do is subscribing for part of it. After that, the mining revenue will be distributed according to the proportion of investment. At present, the service providers that are doing great and with a good reputation on the market include 0x’s Litter Miner and independent service provider Mining Man.
Take Mining Man as an example. After entering their official page through their release platform: AToken, choose a favorite ETH mining product and pay according to the price. Then the users will not need any other extra actions to mine. the reward will be sent to your wallet account regularly and automatically.
Try it by downloading AToken first (Download here).
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