Ice Age: Ethereum mining rewards hit all-time low

Not long ago, ETH and other mainstream currencies rebounded, and the price of the currency rose sharply. It even pushed its total market value to surpass XRP and returned to the second place in total market value.

In addition, there is news that Ethereum mining rewards have reached an all-time low.

According to statistics, on February 11, Ethereum produced more than 13,000 ETH through mining, and in December 2018, more than 20,000 ETH were produced in a single day. Even though the time interval is not long, the difference in output rewards is already huge. Because the historical peak of Ethereum mining on July 30, 2015 was just over 39,000.

At the same time, the block speed of Ethereum is also approaching the lowest level. Now the average block time of Ethereum is 20.2s, which is significantly lower than the average block time of 15s in December 2018!

Apparently, these are all caused by the increasing difficulty of Ethereum mining.

If we know enough about Ethereum, this result can be predicted, and this situation will become more and more serious. But the current situation still brings us some surprises.

In order to transition from the PoW consensus mechanism to the PoS mechanism, Ethereum has set up a difficulty bomb. In the PoW consensus mechanism, miners play a vital role. Once the consensus mechanism is transformed into the PoS consensus mechanism, the balance of power and profit will be transferred from the mine owners to the investors and block users. Therefore, the difficulty bomb will continue to drive away miners, weaken the miners' rights and interests, and avoid too much community disagreement in the final consensus mechanism conversion.

In March 2017, when the block height was around 3.7 million, the Ethereum difficulty bomb exploded for the first time, causing a sharp increase in the difficulty of Ethereum mining and extending the block time to 30 seconds.

It was not until October 2017, when the Ethereum Byzantium upgrade was activated at block height 4.37 million, that the impact of the last "difficulty bomb" was eliminated.

Because the POS mechanism is not ready yet, if the "difficulty bomb" is not stopped, it will seriously affect the Ethereum ecosystem. Therefore, at the Ethereum developer meeting in August 2018, the main developers of Ethereum discussed and decided to postpone the difficulty bomb.

Recently, Ethereum may be about to repeat the scene of 2017. And this situation is also accompanied by the upcoming Constantinople hard fork.

For Ethereum investors, the good news is that as ETH mining rewards decrease, the market circulation rate of ETH will also decrease, which will ease Ethereum's "inflation" and is good for Ethereum prices.

For Ethereum miners, this is not good news, but it is not bad news either. After the postponement of the Constantinople upgrade, Ethereum's transition to the PoS mechanism is still a long way off. With the sharp decline in mining rewards, the status of miners becomes even more important. If Ethereum developers continue to postpone the hard fork, miners will still be profitable without EIP-1234.

Until Ethereum switches to the PoS algorithm, Ethereum miners will lose their role and disappear. This is because PoS rewards investors for mining, that is, the more Ethereum one holds, the higher his computing power will be, and the more Ethereum rewards he will get.

Ethereum has been the second-largest cryptocurrency by market cap for most of the past year, but due to the gradual demise of ICOs, the decreasing demand for ERC-20 tokens, and the bear market in the digital currency market, Ethereum is gradually losing its former dominance.

In short, the road to PoS algorithm conversion is long and arduous, and Ethereum has a long way to go.

P.S. According to the current block speed of Ethereum, it is estimated that it will take 15 days to reach the block height of 7280000, which means that the Constantinople upgrade will not be launched until after February 28.