Understand the basic information and mining features of ETH and ETH 2.0 in one article

Author : Future Brother (SanTi Li)

01What is ETH?

ETH is the native token of the Ethereum network, and is the main medium for value circulation in the network ecosystem. Ethereum is the most active platform for blockchain application development. Through thousands of global nodes, it gradually realizes the vision of "world computer" that replaces centralized servers. Through the Ethereum network, users can also directly and quickly transfer financial value.

02 Basic information and characteristics of ETH mining

ETH supply and market value:

The initial total amount of ETH is 72 million, with an annual increase of about 15 million. From the beginning of 2020 to July 7, the increase was about 2.33%, 2,547,043 ETH. The overall inflation rate of ETH is in a relatively smooth and gradual upward line. There has been no significant increase in issuance or sudden deflation. The overall economic model is in a year-on-year decrease in issuance model. In terms of market value and circulation, there are slight differences in statistics from different data sources, which may be related to factors such as statistical algorithms and network delays .

03 ETH hashrate market share and hashrate main share

As of July 8, the total computing power of Ethereum is estimated to be about 180TH/s. The peak computing power recorded on the Ethereum browser occurred on 2018-08-09, with a computing power of about 296TH/s. The lowest computing power occurred on 2015-07-30, which was only 11.5297 GH/s. However, 2015 was not long after the establishment of Ethereum, so the computing power of the entire network was generally low at that time.

Ethereum network hash rate chart July 7, 2020 (data source: Etherscan)

In the computing power market of ETH products, the main share is shared by mining pools such as Sparkpool, Ethermine, F2Pool, SpriderPool, NanoPool and small miners, among which SparkPool and Ethermine occupy about 50.5% of the computing power market share. The distribution chart of miner block market share in the past month (June 8-July 8) is as follows:

Data source: BTC.com

The hashrate share of the main miners and the number of blocks produced by the top 10 miners in the past seven days (July 1-July 8) are shown in the following figure:

Data source: Etherscan

Among the mainstream mining graphics cards for Ethereum mining, the computing power of the vii is 78MH/s, and the daily output of a single card is about 11 yuan. The computing power of the 2080Ti is about 52.5MH/s, and the daily output of a single card is currently about 7.2 yuan. Among professional mining machines, the computing power of the ETH A10 500M mining machine is about 500MH/s, and the average daily mobile phone revenue of a single machine is about 71.7 yuan.

04 Transition form of ETH 1.0 to 2.0 mining products

According to Glassnode data, the total number of Ethereum addresses with more than 1 ETH is about 1.08 million, the number of wallet addresses with more than 1,000 ETH is about 7,500, about 4,300 new addresses were added in 24 hours, and there are about 26,500 active addresses, indicating that the entire ETH network ecosystem is in a relatively active state.

During the ETH1.0 period, mining was mainly done with graphics cards, and the models were mainly supplemented by some ASIC mining machines. In the current market, second-hand transactions were the main type, and there were not many newly developed mining machines. The models were mainly vii and 2080Ti, and the difficulty fluctuation was relatively stable. Objectively speaking, the transition from ETH 1.0 POW to ETH 2.0 POS is likely to be a parallel transition, and it should not be possible to completely switch to the POS network in the short term. The main reason is that the ETH 1.0 ecosystem is large, and the sharding technology of the entire blockchain world is not mature and is in the exploration stage. The overall transition is not a very simple thing. The release of the primary version of ETH 2.0 (Phase 0) was delayed from the beginning of the year to the fourth quarter, but the current hot spots are still mainly around ETH 2.0. We can see that the sharding and transition of 2.0 are not that easy, so the POW mining equipment and products of ETH 1.0 will not be eliminated soon, and many graphics card mining can be reused in multiple environments.

ETH 2.0 mainly has the following reward and punishment features:

1 ETH 2.0 validators need to pledge 32 ETH to participate in the consensus mechanism of the 2.0 ecological network and receive rewards. If participants do not want to match their own facilities but want to participate in Staking, they can entrust the validator's private key to a third-party staking service provider to participate in the consensus, but they need to guard against single point failure risks such as third-party running away and being punished. As of July 8, 2020, there are currently about 30,253 validators participating in the ETH 2.0 network test. The vast majority of participants pledged about 32 ETH . The top-ranked address currently has a total of 32.4371 ETH , and the current income is 0.437 ETH .

2. Validators are rewarded by voting for LMD-GHOST and Casper FFG.

3. Validators who maintain high-quality contributions online will receive rewards.

4. Validators who report serious violations will receive rewards.

Cost expenditure:

1. Beacon node and client costs.

2. If the verification node commits fraud, it will be punished.

3. Nodes that are inactive or passive will be eliminated.

5. Validators who maliciously submit malicious data to the network will be punished, depending on the number of nodes that commit malicious acts at the same time, up to a maximum penalty amount of the full amount.

The following figure shows Vitalik’s ETH 2.0 Staking proposal, which is a gradually deflationary issuance mechanism: and with an expected staking income of nearly 20%, it is also highly attractive.

In summary

The benefits of ETH 2.0's staking mechanism to the network are mainly concentrated in fast verification and confirmation speed, large throughput, avoiding the congestion of the network due to short-term high-frequency dapps during the POW mechanism, referring to the situation when CryptoKitties occurred, and no large-scale mining equipment is required, only mortgage is required to participate in the construction of the network. It is conducive to the application of financial products. The Ethereum Dapp network is currently mainly based on finance (Compound, MakerDAO) and exchanges (IDEX, Kyber, Uniswap). For a network like ETH that has a relatively sound ecology, the POS mechanism is a good mechanism that can avoid the contradiction of too centralized staking tokens in many similar POS projects .

However, the POW consensus mechanism ecosystem of ETH 1.0 has formed a large system. The vision of transitioning to 2.0 is very good, but the actual operation is somewhat difficult. Lightning-speed transition is not realistic, and sharding technology is not yet mature. The greater possibility is that POW will continue to operate, and POS will gradually transition as a small branch, with a little bit of testing. In this way, the mining industry of ETH 1.0 will continue, and the construction of 2.0 will also proceed steadily.

During the transition period of ETH upgrade, the construction speed of new academic networks such as Algorand and Cardano is also growing rapidly, and Algorand's ATOMIC SWAP and cross-chain value transmission capabilities have great potential. Cardano's Shelley was finally launched after repeated delays, and the trend is good. Traditional POS projects such as TEZOS, EOS, and TRON have also made new moves recently.

The new era of competition in public chains has quietly arrived.

▌Author profile : Future Brother (SanTi Li) ▌Note : Please indicate the author and source at the beginning of the article after obtaining authorization for reprinting. Any reprinting for commercial profit (including but not limited to profits generated by traffic, crawlers, packages, etc.) must first be agreed by the author himself, otherwise the individual or organization will be held accountable for copyright compensation .