Globally, there have been lots of innovations and modernization in different aspects of life. This fact has contributed to the development while easing how people get things done or transact daily. Digitalization is the noble aspect of life that people are diversifying to that has brought a positive dimension to all facets of human endeavors. One of those aspects that are revolutionizing is the digital currency through cryptocurrency. Cryptocurrency has many digital currencies under it, with bitcoin, Ethereum, and a handful of others as the forerunner.
When talking about Ethereum, which is a decentralized open-source Blockchain, it is becoming a prominent crypto among game lovers. Many casino game developers are now incorporating it into their game, making it more than a payment method and a means allowing casino game players to earn through it. On some casino betting platforms like Vulkan Bet casino, to play video games, you will need to use cryptocurrencies like Ethereum to purchase the game you wish to play. For some casino video games or theme-slots, it is only with Ethereum that you can make in-app purchases. In depositing or withdrawing in some online casinos, Ethereum has become an accepted means as lots of players prefer staying anonymous with their game.
Having the Understanding of Ethereum
Ethereum is a decentralized Blockchain platform that has a smart contract through which it functions. It has its cryptocurrency, which is known as ETH, Ether, or Ethereum. It is the second-largest and prominent cryptocurrency after bitcoin. Ethereum is a blockchain in itself, and it is used in verifying and recording transactions.
With the network of Ethereum, users can do various activities such as creation, publication, monetization, and usage of different applications. The cryptocurrency, ETH or Ether, can be used as a means of payment across all platforms where it is accepted. The use of the ETH crypto eradicates the use of financial middlemen like banks, brokers, or exchangers because it is decentralized finance. With Ethereum, there is the use and exchanging of Non-Fungible Tokens (NFTs). These NFTs are non transferable but are integrated into different platforms such as video gaming platforms, digital works of art, and real-world properties or items.
On the blockchain of Ethereum, other cryptos are taking advantage of the ERC-20 tokens for offering coins to users on their platforms. Ethereum also makes use of a decentralized application which is known as dApps. In using this app, users will make a payment fee through what is called “gas.” This gas has its different computational power, which dictates the amount of fee that will be paid for using the Ethereum dApps.
The innovation behind the development of Ethereum is to enable developers to build different smart contracts and distribute applications without any form of interference or fraudulent activities hampering it. Ethereum has described itself as the “world’s programmable Blockchain,” which is different from bitcoin, a programmable network. The platform also claims that it can be used for:
- and trading anything.
The crypto of Ethereum is available for use only within the network of Ethereum, and it has become a widely accepted model of digital payment.
Understanding the concept of Ethereum mining
When talking about mining, it is the process of extraction to add more to the existing substances in circulation. Ethereum mining creates a block of transactions that will be added to the number of Ethereum Blockchain in circulation. The mining of Ethereum is also the critical component of maintaining and developing the Ethereum Blockchain ledger. To carry out the process entails using a well-sophisticated computer capable of solving complex computational math.
With proof of work (PoW), a competitive process that miners employ to write transactions to a new Blockchain, a new block of Ethereum is mined. The process which miners go through in getting Ethereum mined is highly rigorous and cost-effective. But notwithstanding, it is advantageous for miners as they will be able to generate more Ethereum without buying. Many Ethereum investors rely on mining this cryptocurrency because of its magnetic appeal. For Ethereum mining, miners make use of a script which is called SHA-256 and Ethash. Each block transaction that is successful and verified gives a payout of 5 Ether.
The reward is given to the miner who has discovered a solution to the complex and mind-boggling hash puzzle gets rewards more. For a miner to be the frontier in solving the hashing puzzle has to do with the mining power on the miner’s network. Before the mining rig can be set up to mine, a graphics processing unit (GPU) is needed or, as an alternative, an application-specific integrated circuit (ASIC).
For simplified mining of Ethereum, users can also initiate CPU mining. This process entails the command line’s use; any type of computer can carry this process out on the network. Earning of the test ether is provided with this, and it is redeemable only on the test network where it has been generated. Employing this method is less complicated and the easiest way which small-scale private networks can mine Ethereum.
Is Ethereum mining still profitable in 2021
In Ethereum mining, colossal profit has been accrued to it for a very long time. And each month of the year, the profit which miners generate from it keeps doubling. Although at present, mining is not as highly profitable and lucrative as it used to be, it is still profitable to mine Ethereum if, as a miner, you still own the GPU, which is meant for mining. But for someone who is thinking of going into mining Ethereum who needs to purchase a brand new GPU, the return on investment in setting up an Ethereum mining rig may be too low.
One of the factors that influence this is the tariffs that the U.S government has put on it. In getting the GPU, intending miners will spend a whopping sum of dollars to get it and start operation. Another factor that dictates the low profitability of Ethereum mining in this present time for someone who thinks of going into mining is the electricity bill. For instance, a single NVidia RTX 3080 in a single day mines an Ethereum that is worth the value of $6.10. Considering the value, it generates in a single day with the huge dollars in acquiring the high-end GPU; this isn’t worth the ROI. But for those who already have the GPU, there may be enough profit to settle their electricity bills. In further consideration, if the cost to be spent on electricity is relatively low, mining Ethereum is still a profitable investment worth considering.
Going socially and financially, mining Ethereum is still a profitable venture because the value and price of Ethereum have a positive growth rate. In the past years, cryptocurrencies have impacted the world, and in today’s world, more ways to use the currency are emerging. For that reason, if the value of Ethereum increases, miners will have a better return on investment.
In Ethereum mining, different things affect the decrease in the profits that are being generated through mining. Some of those factors impacting it are discussed below.
The value of Ethereum
In the early months of the year, crypto was on the high side. In the beginning, Ethereum value was around $730, and at some point, it skyrocketed up to $4,000. Currently, the price is fluctuating between $2,000 and $3,000. So after mining is initiated and the miner gets paid at the end of the pool, the Ether they earn will be cheaper compared to the peak value of Ethereum. Thus, the crash value of Ethereum mitigates against the profitability of Ethereum mining.
The difficulties attached with mining
This is another factor that influences the low profitability of Ethereum mining. These difficulties have to do with the tediousness associated with finding the next block. In creating blocks, it is always at a fixed rate; the network checks the fastness of the block. So as long as miners add mining power to the network, mining becomes very difficult. When the difficulty is serious, the income becomes reduced.
For the GPU to run effectively to its full potential, the GPU needs not to be hot. Once there is too much heat, this will reduce the mining rate. And when using the GPU, it produces a lot of heat. To offset the heat in the room to make the GPU run smoothly without heat, miners may require to run an AC unit. To do that, this may incur extra spending costs. This issue also impacts the electricity use of the AC unit and the GPU.
In adding gas to the block, miners need to add transaction fees to their mining blocks transactions. The amount of Ether they have to pay for the transaction is not static as this depends on how congested the Ethereum network is. Before adding any transaction to the Ethereum block, miners need to make a competitive bidding price for the spot. For a quick and fast transaction, miners will have to bid at a higher rate far above others. One of the issues that will affect miners’ revenue is the fees they experience in their transactions.
Software and hardware meant for mining
Before you go into mining, consider all involved with it regarding the software and hardware to carry it out.
- You will need a mining application such as the Ethash algorithm, and the mining software must be compatible with it.
- A mining pool address will also be required
- Miners also need a graphic card with a minimum of 3GB RAM before mining Ethereum.
- A sophisticated GPU driver also needs to get the mining started.
- Ethereum mining also demands the use of crypto wallets to receive your Ethereum mining earnings.
- You need to go for an operating system of 64bit to help you initiate the earnings smoothly. The OS can be either windows or any of Linus distributions.
In choosing any software for mining Ethereum, you will need to check the mining hardware strength and the type of mining you have chosen.
In the mining of Ethereum, the profitability has to do with the factors mentioned above and how effectively miners can stay above all these factors. If miners can stay above them, mining Ethereum at this time is still profitable. The type of software miners choose to use will tell on the value of Ethereum mining they will get. As a new miner who is thinking of going into the business of Ethereum mining, it is profitable to some extent but not as high value as it used to be.