|
The two factors of Ethereum switching to PoS and the suspension of 4G graphics cards have made the question of " how long can Ethereum be mined " almost run through the entire 2020 of graphics card miners. The prospect of Ethereum mining seems to be always asked again with the latest news from "2.0" . Now, the initial stage of Ethereum 2.0 will kick off, and mining on the PoW chain will continue as usual. How should miners view the trend and how should they plan? The first thing we want to tell miners is “relax and keep mining”. Then, through this article, we will analyze why Ethereum mining will remain relatively stable in the short term. We will also present the miners’ views and bring you the expectations of major graphics card users for the development of Ethereum mining. The "threat" from Ethereum 2.0 is still far away How long can Ethereum be mined? Many miners have been asking this question, and it seems that they have never found a clear answer. Not only that, but every time the progress of "2.0" is updated, it will bring a certain degree of anxiety, which is actually unnecessary. Although the time range that can be given is relatively broad at present, we should be clear that the key point that affects the judgment of mining lies in the development progress, that is, "how long can be mined" depends on "when the PoW chain and the PoS chain will be merged" . Eth1 is the PoW chain that miners have been participating in, and Eth2 is Ethereum 2.0 with PoS consensus. After Eth1 and Eth2 merge, Eth1's PoW mining will stop, and the entire Ethereum network will complete the consensus upgrade. The entire "consensus upgrade" process requires the parallel development of Eth1 and Eth2, and the two chains have their own schedules. As you have heard frequently, Eth2 is divided into Phase 0 (beacon chain, a PoS main chain), Phase 1 (data sharding, 64 shard chains), and Phase 2 (transaction processing sharding). The expected time for the merger of the two chains is Phase 1.5. Eth2 has been confirmed to arrive on December 1, when it will enter Phase 0 of the main network. Since Phase 0 is not yet available, any economic activities of Ethereum will still run on Eth1, and the underlying consensus is still completely determined by PoW mining . Why is Eth1 still under development? Not only to ensure the normal survival of the entire Ethereum ecosystem, but also to support all stages of Eth2. In order to realize the merger of Eth1 and Eth2, that is, the complete transition of existing economic activities, Eth1 needs to be able to communicate well with Eth2, such as the blockchain witness mechanism, changes to the current Ethereum virtual machine, and the conversion of data structures from hexadecimal to binary. In order to merge Eth1 into Eth2, turn Eth1 from a consensus bottom layer into one of the shards closer to the user layer, and realize remote calls between the two chains, a lot of development work needs to be done. The development of the existing Eth1 is a big project, and the new consensus architecture of Eth2 is even more difficult. Although there may be new alternatives for the merger of Eth1 and Eth2, the Ethereum developer conference recently stated that the development of Phase 2, which seems to be a more distant stage, is temporarily shelved . It can be seen that no one can ensure that this huge system with a market value of more than 60 billion US dollars and facing consensus changes can achieve simple and fast changes. Judging from the current planned time, Phase 1 may take 1-2 years, and the "expected" delay seems to be common in various blockchain projects. It may take a longer time to have a highly scalable and fully usable PoS Ethereum. The interests and positions of all parties involved in the conversion of consensus are still a part that needs to be overcome. In addition to considering the mining income of miners, the more practical question is whether the Eth2 code can safely undertake the existing DeFi projects with a locked value of more than 13 billion US dollars? The transition of wallets, exchanges, stablecoins and many infrastructures will take more time. Until all this happens, Ethereum still needs PoW mining to support the smooth operation of this system. Incentives and benefits Considerable output value and relatively stable block rewards How will mining revenue change with the Ethereum consensus transition? This is another confusion about mining. How will the revenue change? Simply put, it is "to be determined", and no proposal that has been widely discussed and recognized has yet appeared.
Let’s first look at the block reward. The Ethereum protocol itself does not have an automatic production reduction mechanism like Bitcoin, but is implemented through the deployment of EIP (Ethereum Improvement Protocol) during the hard fork upgrade process. After the Byzantium upgrade in October 2017 and the Constantinople upgrade in February 2019, the Ethereum block production was reduced from 5 ETH to 3 ETH, and then from 3 ETH to the current 2 ETH. Therefore, whether Eth1 will carry out targeted production reduction after Eth2 goes online also needs to be determined through proposals, discussions, and deployments. The main purpose of Ethereum's previous block production cuts is to adjust supply and reduce inflation. As for the reductions intended to limit mining and transition consensus, there are no widely discussed proposals. EIP2878 proposed to reduce the block reward from 3 ETH to 0.5 ETH. It was discussed for a short time, but because the idea was too radical, it received a lot of criticism and the chance of being implemented was quite slim. Even this radical proposal of a 75% reduction is only related to benchmarking Bitcoin's inflation rate and increasing Ethereum's purchasing power. So will the gas fee income change? In terms of miners' interests, the community is more focused on the adjustment of gas fees. EIP1559, proposed by Vitalik as early as 2018, aims to make the gas fee market more predictable and reduce network congestion by setting the same base rate for transactions and burning gas fees. Not to mention the reduction in miners' income, there are many objections or doubts in the community about the feasibility of EIP1559 and whether it can really promote network development. Some serious economic analysis is also underway, and it will take some time before it is truly implemented. EIP1559, which would drastically cut miners’ gas fee revenue, is not on the implementation list in the short term. Ethereum’s most recent planned upgrade, Berlin, was postponed from August to January next year, and EIP1559 was not taken into account. Comparison of Ethereum block rewards and gas fees Data source: Coinmetrics.io
Taking a step back, even if the gas fee of miners is greatly reduced, will it really significantly affect the mining mentality of miners? We know that the DeFi craze has significantly increased the proportion of handling fees in miners' income several times, and this situation of miners "making money lying down" is rare in the Ethereum mining over the years . Mining income is still the main source of income, not gas fees.
What is the mining potential in the ETH "gold mine"? From the above information, we can see that there is no definite sign that the two miners’ incomes, block rewards and transaction gas fees, will decrease soon. During the period of consensus upgrade, Ethereum, a PoW consensus network with a market value and mining output second only to Bitcoin, still ranks first in graphics card computing power and is the main battlefield for graphics card miners .
PoW daily output and other data (November 30)
Data source: F2Pool PoW ranking According to the PoW rankings on the F2Pool website, Ethereum produces more than $6.7 million per day, more than 10 times more than Litecoin, which ranks third. In a recent AMA, Vitalik answered questions about the supply of ETH tokens and said that in the next 1 to 2 years, the annual supply of ETH will be about 4.7 million ETH . This number is consistent with the current annual supply. Even without counting transaction gas fees, the "post-Ethereum era" after Phase 0 is still a tempting mining treasure. The "coin price" is still the key factor that determines the behavior of miners. The launch of Ethereum 2.0 has objectively promoted the long-term value of ETH. Coupled with the entry of Grayscale and more institutions, the rush to mine, hoard coins, and use graphics card computing power in exchange for "chips", a bullish secondary market is a strong driving force for miners to "increase their stakes" .
We already know that Ethereum still needs PoW, so whether it is block rewards or transaction fees, any changes in the network need to give miners enough incentives to make the computing power strong enough and free from attacks, so that there can be an overall bullish market value scale and the network can develop.
Update equipment and stick to the Ethereum computing power base How should miners respond to the Ethereum consensus conversion upgrade? F2Pool COO Dayu pointed out that Ethereum 2.0 is carried out in stages, but the process of converting the consensus has been delayed again and again. It is recommended that miners who have already participated continue to mine steadily. If they make large-scale investments, they can calculate the payback period of mining according to the situation. At present, it is foreseeable that PoW mining will continue for two years.
Upgrade your equipment. With the arrival of Eth2 and the DAG file of Eth1 about to reach 4G, it is time to upgrade your equipment for miners with 4GB graphics cards . Unupgraded graphics cards are forced to withdraw from the Ethereum mining market. From the perspective of revenue, many miners can only choose some networks with relatively low revenue . A large amount of 4GB graphics card computing power flowing into smaller networks will also increase the difficulty and reduce the revenue in a short period of time, causing the output of equipment to drop further. If you upgrade your equipment, you can continue to occupy the main position of graphics card mining.
Zhang Songqing, co-founder of minerOS and a major graphics card miner, shared with F2Pool that he has completed the replacement of machines during this round of coin price increases, replacing the old generation of graphics cards with a new generation of graphics cards with better power efficiency and stronger risk resistance . Zhang Zhenyu, a major graphics card miner, also shared with F2Pool that he has updated his graphics card equipment, which is basically 5700XT or equivalent . He believes that Ethereum mining equipment will be greatly improved in the first half of next year, and new ASIC mining machines will appear.
For users who already have equipment, changing the card seems to be more secure. The cost of continuing to "get on board" is lower, and the second-hand value can be increased when it is sold in the future. From the perspective of upgrade methods, some graphics cards like P104 only need to refresh the firmware, while other graphics cards such as RX470, RX480, RX570, and RX580 require hardware upgrades and replacement of video memory particles, replacing 8 512MB video memory particles with 8 1GB video memory particles, which is the " 4G to 8G " that miners often discuss recently .
Diversified layout. Graphics card mining is different from professional mining machines. It has the characteristics of adapting to multiple networks and switching between different networks. This seems to affect the thinking of miners to diversify their layout to a certain extent. "From a longer-term perspective, when the PoW chain is fully incorporated into Ethereum 2.0, there is currently no network that can take over the computing power of Ethereum," said Zhang Songqing. "While updating hardware equipment, we will also consider locking up the PoS chain as a verification node. We are currently planning things other than mining to diversify our development." However, to move into an unfamiliar field, you must first learn enough information and then enter the game steadily. Stakefish, a PoS technology facility service provider that currently maintains 8% of the Genesis nodes, shared that although the yield of Ethereum 2.0 Staking fluctuates between 2% and 20%, and you can participate as long as you hold coins, there are many potential risks that need to be understood in advance, such as software or network bugs, or penalties due to double signing, uncertainty caused by long lock-up time, and the risk of coin price fluctuations, etc. Therefore, it is very important to choose a service provider that has a good operating record and can respond around the clock. Ethereum mining, keep on board! Now that we understand the progress of the network, mining revenue, and the various options miners face for consensus upgrades, let us once again look at the Ethereum and graphics card mining market from the perspective of the current status of the hardware market.
Observing this year's graphics card market and future trends, Zhang Songqing believes that the demand for graphics cards in the short term basically depends on the chip production capacity that can flow into the mining field. Judging from the rise in coin prices, the increase in computing power has not yet fully caught up. "Miners are still very willing to increase computing power, but they are mainly restricted by the shipments of AMD and NVIDIA. There will not be much growth in computing power before the end of the year. " He believes that since graphics card manufacturers are still relatively cautious about the mining industry, large miners can only obtain graphics cards in the market, which can to a certain extent restrict the excessive concentration of computing power. "But overall, there are more miners with more than 10,000 graphics cards this year, and in the following year, there will be more and more computing power giants."
As for Ethereum computing power, Zhang Zhenyu is optimistic about the overall upward trend of computing power, and believes that " next year will definitely be a magnificent year for Ethereum mining ." He believes that the path of Ethereum PoW cannot be changed in the short term, "it can definitely be mined, at least for three years or even longer." Not only that, "some new ASIC mining machines from well-known mining machine manufacturers have entered the wafer production stage." Due to the expectation of continued increase in computing power, while fully reflecting the popularity of Ethereum PoW mining, it will also make the competition more intense.
In general, we see that although the Ethereum 2.0 Phase 0 mainnet will be launched, the atmosphere of continuing to mine and hoard coins is still high. Whether it is the improvement of Eth1 or the changes of Eth2, when it comes to applications, expansion, and future trends, people's attention and topics are still focused on "Ethereum", the world's largest smart contract network, which is also the value engine that supports the continuous growth of computing power.
|
