How To Increasing Ethereum Mining Difficulty: Consequences | Profitability – Ethereum appeared on the cryptocurrency market in 2015, it was created by programmer Vitaly Buterin. Ethereum mining is very popular and today it takes the 2nd place among the mining platforms after Bitcoin, only it is easier to mine Ethereum. With the increase in the number of miners, the difficulty of mining the currency began to increase.
This problem haunts all electronic money, the work of which is based on the Proof of Work protocol (proof of work performed). The miner, in order to receive a reward, provides the power of his equipment. The difficulty of mining Ethereum has its own distinctive features, it is worth considering in more detail.
What is network complexity
The indicators characterizing the complexity of the Ethereum network (block difficulty) are indispensable for calculating the profitability of mining this cryptocurrency and they make it clear whether it is worth mining at all. The concept is used as a characteristic of the time required for block validation. For this value, there is a Nonce definition parameter, a hash, which, together with mixHash, is a confirmation that the required number of calculation operations have been performed for the block. The expected time to find it is called an indicator of the difficulty of mining cryptocurrency.
The hashing algorithm for Ethereum is Ethash, and it sets the metadata of the last block in the blockchain network using the Nonce code. It is not possible to guess it just like that, for this reason, the use of equipment with high computing power is necessary in order to encrypt the block and receive a reward. The indicators are adjusted automatically by the system, and they must all be in full compliance. The time spent on block validation is set when the level of its complexity is determined, in the event that it turns out to be less than expected, the system will reduce the level of network complexity.
Where to see Ethereum difficulty
To analyze the effectiveness of mining, it is worth constantly monitoring the dynamics of the difficulty level. To do this, there are online charts that reflect current information. When analyzing data and making a forecast, the following points should be taken into account:
- Measurements are made taking into account the time of production of the next block. Therefore, on different sites, the indicators may vary slightly.
- The most accurate value can be obtained by calculating the arithmetic average of data from several sources.
- To analyze the dynamics and reasons for growth, you need to take into account the history of several months, and not the charts of one or two days.
Among all the sites where you can see information about the labor intensity of mining, it is worth highlighting the following resources:
- Bitinfocharts.com is the most descriptive and accurate ETH difficulty chart. It has complete information since the launch of the Ethereum network. The advantage of the site lies in the function of comparing coin charts. To activate it, you just need to press the buttons below the picture.
- Cryptorate.ru is a convenient site that allows you to view a chart for a time specified by the user. For a detailed analysis of fluctuations, there is a zoom function that allows you to view fluctuations over a short period. The page contains incremental time scale buttons that allow you to instantly display day, week, month, or year information.
- Coinwarz.com is a chart with a simple and visual structure. Nothing superfluous: a horizontal timeline, a vertical difficulty value, zoom buttons and time period selection fields. The deciphering of the values by dates located under the graph will help in analyzing the dynamics of the difficulty of production.
Analysis of trends based on data from the history of the network allows you to predict the development of mining.
What is a “difficulty bomb”?
The “difficulty bomb” was invented by Ethereum developers as a way to make mining very difficult. Its purpose is to make cryptocurrency mining a completely unprofitable business in the right period of time. This move was needed by programmers as part of a plan to rebuild on Proof of Stake. The algorithm sets deadlines for the changes to take effect and forces the system to go according to the plan invented by the programmers.
Important! In the summer of 2021, the network complexity indicator increased 200 times compared to the initial one.
Ethereum difficulty graph online
The current Ethererum difficulty chart can always be viewed at bitinfocharts.com. Graph data is updated with minimal delay. You can also see other indicators there, such as hashrate, average commission, time to create a block, etc.
As of March 2021, the difficulty of mining Ethereum has increased by more than 1500 times compared to the initial values.
Next, we will analyze why the Ethereum complexity graph is changing, what factors affect it, and try to make a forecast of complexity for the near future.
Mining features
The extraction of Ethereum and Ethereum Classic occurs according to an algorithm that differs from that for Bitcoin mining. But the main principle of the process is still unchanged. Bitcoin mining requires specialized expensive equipment, it is no longer profitable to mine BTC using video cards, and the creation of Asic farms is too expensive. Therefore, back in 2021, when Ether was very expensive, it then reached 9000% of the lowest value, a huge number of miners were attracted to the Ethereum system.
Until recently, the difficulty of mining ether grew slightly, because it was possible to mine coins only on your own on the Geth wallet. It was quite difficult for a poorly prepared participant.
This circumstance strongly repelled most of the miners, despite the fact that the price of coins was attractive, and mining brought good profits.
Today, Ethereum mining is still a profitable business, as the cost of ETH and the capitalization of this electronic money are high. Experts suggest that the price of the currency will rise further. But for extraction it is necessary to have powerful equipment. The parameters of video cards must be correctly selected and provide the necessary performance in order to successfully encrypt blocks. The hashrate of a video card depends on the following characteristics:
- The amount of memory (required from 4 GB).
- speed (DDR5).
- The bit width of the video card memory bus (minimum 256).
- Cooling system.
- Overclocking capability.
The hashrate is also very strongly influenced by such factors:
- operating system and its features;
- type and type of device (farm or PC).
In order to correctly calculate how profitable the extraction of electronic monetary units will be, taking into account all circumstances without exception, it is worth using the following resources:
Important! The complexity of the Ethereum network will only increase every month, and after the transition from POW to POS is made, mining will no longer affect the security and operation of the platform.
Today, it is not worth starting Ethereum mining from scratch, it is better to mine coins in cloud services.
What do you need to start mining Ethereum?
The best Ethereum mining option for 2021 is cloud mining, due to the flexibility of contracts and more favorable working conditions than mining on your own equipment. The rating of reliable cloud mining services can be found here.
If you still decide to mine ETH on your own equipment, then you will need:
- A video card with good performance, at least one, but optimally 4-6 GPUs per computer farm.
- Naturally, a computer (system unit) or a farm with an installed operating system (Windows x64). It’s the 64 bit version.
- Decide on the currency that we will mine. There are several cryptocurrencies based on the Ethereum algorithm (dagger hashimoto), the largest of them are: Ethereum Classic (ETC), Musicoin (MUSIC) and others.
- Since mining is online, we need the Internet. Fast speed is not needed, but good ping is desirable, more on that below.
- Select a pool (POOL) where we will mine ethereum. Next, select the miner program and configure.
- Choose an exchange or an Ethereum wallet where ours will drip and accumulate for mined Ethereum coins, as well as services where you can exchange our earned coins for rubles and withdraw to a card (review of cryptocurrency exchangers).
Internet fast is not required, but it must be with good ping. If you connect via cable, then of course this is the best option, but Wi-Fi is also suitable.
Why is Ethereum mining difficulty increasing?
There is a simple answer to this. When the developers created the cryptocurrency, they laid down a fixed number of coins that users would mine for a certain period of time. If users have mined more tokens than they should, then the difficulty of mining Ethereum increases. This is done to slow down the emission.
Conclusion! If fewer cryptocurrencies are mined than required, then the difficulty is lowered, and coins are mined easier and faster.
How fast the complexity grows
The Ethereum network is designed so that new blocks are added to the chain approximately once every 10 minutes. Since everyone wants to earn money, computing power is constantly growing. In this regard, there must be a certain parameter that compensates for such growth. The complexity of the network has become such a parameter, it is recalculated once every two weeks or every 2021 blocks. The rate at which network complexity grows is impossible to predict, but guesses can be made. On average, it grows by 9% per month.
ETH network power: how has the difficulty of mining ether changed in the past?
The power of the Ethereum network (Ethereum) – an indicator that affects the complexity of the coin, is associated with the popularity of the token among miners. The more powerful the system, the more difficult it is to mine blocks.
The difficulty of mining ether has almost always increased (until the introduction of new solutions to deliberately reduce this indicator). So, for example, back in 2015, for ETH, the mining difficulty was about 1.2 terahash. Further, Ethereum is known to have had a rise time and mining difficulty increased at a moderate rate.
Then the picture changed dramatically: getting blocks became several hundred times more difficult and the figure was 250 terahesh. Further more, the difficulty increased to 1200 terahesh, and then completely rose to 3000 terahesh. After that, the developers had to deliberately reduce the indicators so as not to lose miners before switching to a new algorithm. However, the decline was temporary. The distribution of new ASIC models for Ethereum mining had a great influence on the indicator. The increase in complexity continued. At the time of writing, the complexity of the Ethereum network is 7.67 P = 7,670 T = 7,670,000 G. Sometimes the complexity is indicated in P/T/G or Ph/Th/Gh. This does not change the essence, the complexity of Ether is 7.67 petahesh = 7.67 thousand terahesh = 7.67 million gigahesh.
The uniqueness of the Ethereum network
The Ethereum network, according to many experts, is superior to the Bitcoin platform in many ways. The introduction of smart contracts, which make it possible to register a transaction involving different assets, greatly contributed to this. Also, the Ethereum network has a feature in the form of increased productivity of coin mining. In addition, transactions are processed at a high speed and new blocks are generated quickly. On the Ethereum network, you can get a stable profit from mining.
The mining mechanism of Ethereum coins is unique in its own way. As with other cryptocurrencies, the difficulty of mining ETH is slowly but steadily increasing. But the team of platform programmers has planned a major innovation, it will greatly affect the emergence of new coins.
The groundwork for the upcoming changes was laid last fall with a unique update called “Byzantium” – a “complexity bomb”. It is required in order to switch from the familiar POW algorithm to Casper, the latest PoS-like algorithm. After the transition, mining will no longer be profitable, but so far this has not happened yet, and Ethereum mining still brings a good profit.
ETH speed: network hashrate and how it relates to difficulty
An important indicator is the speed of Ethereum, or more correctly, the hashrate of the network.
The hashrate shows the performance of the mining equipment. Hashrate is measured in solutions per second. In the Ethereum network, one solution is called hash, abbreviated as h. Accordingly, mining performance is measured in h/s (hashes per second).
1 Kh / s = 1,000 h / s
1 Mh/s = 1 000 Kh/s = 1 000 000 h/s
1 Gh / s = 1,000 Mh / s = 1,000,000 Kh / s = 1,000,000,000 h / s
1 Th/s = 1 000 Gh/s = 1 000 000 Mh/s = 1 000 000 000 Kh/s = 1 000 000 000 000 h/s
A video card or a mining farm sorts through thousands, millions of hashes (solutions) per second. For example, one NVIDIA 1070Ti video card, according to the 2CryptoCalc mining profitability calculator, has a hashrate of 31 MH / s, i.e. it goes through 31,000,000 solutions per second, solves the hash function 31 million times per second.
The word “solution” in this case refers to the answer obtained as a result of one cycle of the miner program. Miners solve the hash function given by the cryptocurrency algorithm many times per second. One decision of the hash function or simply hash is what we are talking about. Mining itself is a “guessing game” in which miners solve this hash function, sort through possible block solutions until they find the right one. After finding the block, the task changes and all the miners of the world begin to search again.
What is network hashrate and how is it calculated? The Ethereum network hashrate shows the overall performance of all miners on the ETH network. The current Ethereum network hashrate is 566.28 TH/s = 566,276,205,509,370 h/s. The network hashrate is a calculated value. To find the network hashrate, the current value of the network complexity is used , the average block time set by the network and / or the real time of finding the last blocks.
Difficulty History
Since 2021, the number of miners in the Ethereum network has been growing rapidly. A well-developed infrastructure played a major role in this (the appearance of many pools, new wallets, as well as instructions). The Ethereum exchange rate has increased by 9000% from its original price. This had a positive impact on the mining of coins, it became very profitable to mine them.
Almost immediately after that, the difficulty began to increase. This continued throughout 2021, until growth reached 3,000 terahashes in October. The complexity of mining tokens increased in full accordance with the growth of the ETH rate. It grew from $10 to $300 in 10 months of that year.
After that, there was a collapse in the complexity of mining coins to 1500 terahashes. This was affected by the new update “Byzantium”. As mentioned earlier, it became the foundation for the “complexity bomb”. But despite everything, the growth in the value of Ethereum continued and peaked in January 2021. Then the price of the coin was fixed at $1415. The period that lasted from October 2021 to January 2021 is the most profitable in the history of Ethereum mining.
Factors Affecting Ethereum Difficulty
- The cost of Ethereum and electricity tariffs (affect the profitability of mining and, as a result, the number of those involved in it);
- Changes in the amount of remuneration for miners and the time spent by blocks (through hard forks);
- General sentiment in the crypto market (during a bearish trend miners leave, during a bullish trend they return);
- The level of technology development (connecting more productive devices to the network leads to increased complexity).
Current Ethereum Mining Difficulty
After the Byzantium update was made, the difficulty began to recover. At the moment, this figure is 3183 terahashes, and this despite the fact that the Ethereum rate has fallen significantly. At the end of April 2021, the coins are worth $400. This greatly affected the profitability of mining.
According to information obtained from coinwarz.com, Ethereum is the most profitable e-currency for miners: having powerful equipment of 108 Mh / s, taking into account the electricity consumption of 600 W per day at a price of $ 0.054 / kWh, net earnings will be 3- $4 for 24 hours.
Important! If the miner does not have equipment with the highest possible computing power, then the high complexity of mining will lead to the fact that it will not stay afloat.
Further forecast
Given the rapid growth in the complexity of Ethereum, it is difficult to say how far this indicator will soar. If you do not have enough powerful computing equipment, then staying on the Ethereum platform and earning your coins on your own can be extremely difficult.
Initially, the use of the Ethereum network was planned for large blockchains, so you can save your position by pooling. Finding blocks in teamwork may not give you the opportunity to make decent money, but it is guaranteed to bring at least some income.
You can also always run a miner for other cryptocurrencies, for example, Zcash or ETC, which will bring more income compared to ETH. Therefore, in order to successfully earn your ethers, the main thing is to conduct periodic statistics on changes in the main parameters of the platform, especially the difficulty of mining and the exchange rate of the electronic currency.
Forecast for 2021
Due to the fact that the developers of the Ethereum network promise to soon transfer coin mining to the Proof of Stake algorithm, it makes no sense to buy special, expensive equipment. It may happen that the funds for the acquisitions will be spent, but it will not be possible to recoup them. It is much more efficient to spend money on buying as many Ethereum coins as possible.
But here, too, there is one drawback. None of the specialists or ordinary users will guarantee that the POS algorithm will work in 2018, despite the promises of the developers. Also, no one knows what will happen to the tokens themselves if Proof of Stake starts working. Some experts argue that there is a high probability of a collapse in the Ethereum exchange rate. After that, it will be difficult to recover.
If the miner has a powerful cryptocurrency mining farm, then it is worth trying to get the maximum possible number of coins before the end of the year. As long as it is possible to do so. Those who do not have expensive equipment can do cloud mining. Thus, it will be possible to avoid unjustified expenses and the risk of recapturing the invested funds. Of course, everyone must make their own decision, but it is worth considering all factors before investing personal savings.
If you soberly assess the current situation, you can see with the naked eye that the complexity of the network is constantly increasing. The update, called “Byzantium”, prepares the blockchain to move to the POS algorithm. In this regard, an “Ice Age” may soon occur – a certain period of time when it will be simply impossible to mine Ethereum.
The reward for a mined block has already decreased from 5 to 3 ETH today. Thus, the developers are preparing the ecosystem for a new hard fork. If in the coming weeks or months the Ether rate becomes higher, then by the end of the year, it can be mined, and if it drops, then mining will become unprofitable.
You may also be interested.
How to maintain the profit of a cryptocurrency farm
Every technique needs maintenance. Otherwise, the efficiency starts to drop. When it comes to mining, the user loses profit. Initially, video cards were not developed for cryptocurrency mining, so the manufacturer did not take into account some of the nuances of work. To achieve maximum performance, you should pay attention to the following factors:
- Overheat. A PC usually has 1 powerful video card and provides enough space for air movement. In some cases, an additional cooler is added to the case to make it easier for the video card to maintain optimal temperatures. In the case of farms, some users set 4-6 cards too close to each other. Because of this, the warm air has nowhere to go and the video cards in the middle overheat, turn off, or even break down. The profitability from finding blocks falls, even if the difficulties have a negative trend on the chart.
- Service. Every farm collects dust. If the video card is not cleaned for a long time, there may be so much dust that the card will turn off at the first load. You also need to replace the thermal paste periodically. The specialist is recommended to carry out a full service once a year. However, most miners prefer to clean the card from dust and change thermal paste after overheating problems occur.
- Video card overclocking. You can improve productivity with simple manipulations. This may increase power consumption and shorten the service life. However, with a competent approach, you can achieve an increase in hashrate up to 10-20%
. The main thing is not to increase the voltage on the GPU.
Miner settings for Ethereum Classic
On November 28, 2021, the hard fork of Ethereum Classic called Thanos took place. Its main task is to change the mining algorithm to Etchash and reduce the size of the DAG file, as a result of which it will be possible to mine ETC on video cards even with 3 GB of memory.
At the same time, the network will be protected from ASIC miners, in addition, the NiceHash platform will not support it. Accordingly, 51 percent attacks on ETC should be a thing of the past.
Here are the current settings for mining cryptocurrency on the 2Miners pool.
The first is the .bat file for the T-Rex miner.
t-rex.exe -a ethash —coin etc -o stratum+tcp://etc.2miners.com:1010 -u 0x00192Fb10dF37c9FB26829eb2CC623cd1BF599E8.RIG_ID -p x —fork-at etchash=epoch:390 pause
Below are the settings for Gminer. Which supports automatic switching to Etchash.
miner.exe —algo etchash —server etc.2miners.com:1010 —user 0x00192Fb10dF37c9FB26829eb2CC623cd1BF599E8.RIG_ID
And here are the settings for lolMiner, an overview of which is at the link.
lolMiner.exe —algo ETCHASH —pool etc.2miners.com:1010 —user 0x00192Fb10dF37c9FB26829eb2CC623cd1BF599E8.RIG_ID pause
And settings for PhoenixMiner.
PhoenixMiner.exe -pool etc.2miners.com:1010 -wal 0x00192Fb10dF37c9FB26829eb2CC623cd1BF599E8.RIG_ID -coin etc
It is very important to replace the specified address with your own in order to receive a reward. The current versions of the miners, as always, are in this archive. The password for him is 2miners, with a small letter and without any spaces.
Some terminology
In the process of development of the cryptoindustry, terms and names have appeared that are not used anywhere else.
The concept of ether complexity for the blockchain takes on a different meaning.
Difficulty of Ether, derived from the English Difficulty Ether, is a unit parameter that shows the miner the possible levels of difficulty in finding a hash on the network, and the conditions are proposed directly by the target network.
To have a clear idea on a specific example, let’s take the usual fiat money. Here, the labor input will be limited to emission.
A similar concept applies to cryptocurrency mining, that is, it is not possible to mine as many coins as you want in any given period of time.
The total aggregate number of digital assets cannot be more than the amount programmed by the source code of the settlement number.
In order for the coins not to be generated at the same time in the process of work by miners, SEO developers introduce forced restrictions.
Thus, the reward is conditionally 1, but the number of contenders for the reward (in the face of miners) is a huge number, respectively, it is growing, the competition between them is fierce.
Who will become the owner of a single reward will show the algorithm for calculating the complexity of the ether, which is used to obtain the necessary reward.
Thus, any mining difficulty ultimately points to difficult ways to achieve the task, where the difficulty itself is a tool to regulate the generation process.
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Peculiarities of the growth of ETH production labor intensity parameters
It was previously indicated that in the initial period of the existence and development of the ecosystem, a large amount of ETH was transferred to institutional crypto investors.
This moment at the very beginning of the organization of the ecosystem, for a very long time supported both the very laboriousness of token mining and exchange rate stability.
For a long time, the difficulty indicator did not change its original position.
The next factor influencing the difficulty of finding a hash is the calculation technique that is used to form blocks and, accordingly, conduct transactions.
With the help of a special calculation technology program, restrictions are imposed on each crypto wallet.
By the way, even the wallet setup itself has the complexity of downloading and current settings.
This moment in the early days of the coin pushed many miners away from Ethereum.
SEO developers believe that the lack of a huge influx of miners at first allowed ETH to get on its feet and not collapse, as happened with some other crypto projects.
Now we move on to the most interesting, which is referred to in the crypto community as the “difficulty bomb”, although some also call it the “ice age bomb”.
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Is it worth it to start mining cryptocurrency now, given the current difficulty of mining Ethereum
It is impossible to answer the proposed question in the affirmative or negative, since you need to focus on a number of parameters before evaluating the prospects of Ethereum. Judging by the information published on the specialized portal, the network is still among the beneficiaries. The profitability of Ethereum mining is still maintained, but it directly depends on the issue of new tokens and investments in the payment network. Now, in order to make a profit, it is important to give preference to pools that offer affordable conditions for the extraction of digital coins.
What miners expect when they buy farms on credit
The payback of farms invested at the stage of the growth of the rate is ensured by the injection of huge amounts into cryptocurrencies and ico, the so-called whales (investors who buy billions of dollars worth of cybercurrency).
If you look at the current situation, then the income sags every day, and if yesterday it was $800 from one farm based on 6 rx470 video cards, today it is already $225.
The number of coins received inevitably decreases – this is a fact, but the profit depends not only on the number of coins mined, but also on their value, which also changes.
It may be interesting: the cost of video cards rx470 from 03/09/2017
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