Why Do You Need to Know Ethereum Mining Profitability?

Why Do You Need to Know Ethereum Mining Profitability?

Mining is nothing but the process of solving blocks or complex mathematical problems by making use of computing powers from specialized mining devices. In mining, user transactions are verified and then added to a blockchain which works like a public ledger. Rewards are given to the miners who have successfully solved the problems and these are the crypto coins. While in the case of Bitcoin, rewards will be in the form of Bitcoins, in Ethereum mining, rewards are in the form of Ether coins. To know whether it is actually profitable to mine Ethereum, it is advisable to check the Ethereum mining profitability beforehand. This is possible when you use online mining profitability calculators.

ethereum-vs-bitcoin-mining

How is Ethereum mining different compared to Bitcoin mining?

When there was an unprecedented spike in prices of Bitcoin, more and more people started mining this cryptocurrency. But, when they had mined for some time, it was realized that the mining processes had become sluggish and mining hardware required high-end maintenance and lots of electricity. So, the miners were keen to explore alternatives and this is how Ethereum mining came to be.

One of the key differences between Ethereum mining and Bitcoin mining lies in the fact that Bitcoin mining can be done with specialized hardware but Ethereum mining is done using GPUs. The Ethereum network is ASIC resistant and users are therefore not able to use dedicated hardware like in the case of Bitcoins. just like those having higher investment powers can produce superior mining rigs for mining the Bitcoin, similarly those having high-end GPUs can easily install a far more powerful mining rig. It is also possible to mine Ether using traditional CPUs. But this is not too productive and this is why mining with GPUs became more popular.

Ethereum mining is popular as it does not need very high-end costly devices and hardware which can burn a hole in your pocket. In short, Ethereum mining may be practiced at home as well and the energy demands for this mining are found to be lower than that of Bitcoin. Since it is easier to mine Ether, profits are also higher. While you may be expected to make some initial investments, these are much lesser when compared to investments for Bitcoin mining.

To know Ethereum mining profitability, you will need to use online mining calculators. You can enter different inputs in these online tools like hash rates, power consumption costs, hardware expenses, cooling costs, the current Ethereum price, mining difficulty levels etc. For mining, you will need to get specialized Ethereum mining hardware and software, an Ethereum wallet and Ethereum mining pools.

Finding out about Ethereum Mining Profitability:

The Ethereum mining calculator refers to a simple calculating device which can help you understand whether mining Ethereum will generate profit for you or not. It will tell you how many others you can generate through mining using specific hardware. For getting accurate results, you will have to consider electricity costs in the area were the mining rig is installed and the configurations of your mining rig.

It is important to understand that cryptocurrency mining is never an easy decision because miners must take into account all kinds of risks in it before they start out. With mining calculators easily available these days, it is possible for miners to verify the profitability of any cryptocurrency to make plans in advance. While the calculator is undoubtedly an excellent resource for the new miners in the business, it is equally useful for those who are already mining Ethereum. Since cryptocurrencies are dynamic by nature and many factors are constantly changing, like difficulty levels and current market prices, it is necessary to monitor Ethereum mining profitability all the time.

A key factor which can change your fortunes is the Ethereum price. Ethereum is considered to be the second largest cryptocurrency in the world but is prone to market volatility. It seems to be slightly more stable as compared to the Bitcoin which witnesses sharp rises and falls in its price. So, for those who are just starting out in the cryptocurrency mining business, it is crucial to know about this price volatility. When the demands rise for Ether, prices go up and when demands are low, prices automatically fall. But, unlike Bitcoins, Ethereum is not limited in number. This is perhaps why this cryptocurrency is more stable than the Bitcoin.

Among the factors which influence mining profitability of Ether the more common ones are prices of Ether in the market. The higher these prices, the better the profits you can make and when the prices fall, the profits are also lower. Costs of mining hardware will also influence the profitability. Mining is an expensive task and it needs high-end machinery which can cost you a fortune. Besides, power costs must also be taken into account to determine profitability. In mining, a lot of electricity is consumed and this is why countries which can offer low-cost power supplies are attracting miners.

2017 to Today: Ethereum Predictions Are Aging (But Not Well)

2017 to Today: Ethereum Predictions Are Aging (But Not Well)

Alex Sunnarborg is a founding member of Tetras Capital Partners, LLC, an investment manager focused on investing in crypto assets.

Eighteen months ago, CoinDesk sent a survey to its readers asking for their opinions on the current state of the crypto ecosystem. The results were analyzed and published in the State of Blockchain Q1 2017In this piece, the original author reflects on some of the core findings.


The most striking survey response was also the most straightforward to understand: sentiment around the ‘overall state’ of bitcoin and ethereum.

Less than 5 percent of those surveyed in Q1 2017 felt even slightly negative about the overall state of ethereum. The sentiment and optimism could have hardly been any higher.

Network Data: Then and Now

At the time, the number of transactions on the ethereum network was rising.

Transactions on the bitcoin network were rising as well, but the magnitude of growth was less dramatic, and bitcoin blocks had started to average over 90 percent capacity.

Demand for bitcoin block space lead transaction fees to average north of $1 for the first time ever while ethereum’s fees averaged less than $0.05.

It was clear that transaction fees were a large component of the negativity that survey participants felt when asked about bitcoin.

In the 18 months since, we’ve seen the rollout and initial usage of both SegWit and Lightning Network to help address bitcoin scaling, but the block limit kept the on-chain transaction count bounded under about 400,000 per day. Without the same limitations, we saw ethereum’s transactional count exceed 1m per day in late 2017.

During that period, we saw ethereum’s average transaction fee exceed $1, but also watched bitcoin’s pass $50.

When block space is abundant and transaction fees are low, high transaction counts are easy to achieve, useful or not (similar to concerns around trading volumes on zero-fee exchanges).

Analysis has now been done that claims that one mixing system comprised over 60 percent of all ETH transaction volume between February 2017 and February 2018.

Dapps and ICOs

Ethereum had the largest ICO to date in July 2014 and the genesis block was created a year later in July 2015.

In the year between the ICO and mainnet launch, many projects were experimenting with creating early dapps, including Augur, launching a smart contract on the ethereum test net in April 2015.

Many in the community loved the idea of a decentralized prediction market, and in late 2015, Augur used the ICO model to raise $5 million to continue to build out their platform. The Augur ICO was for REP, a token which allows holders to act as oracles to settle markets after the fact in exchange for a percentage of the total amount bet.

Users do not have to own REP and can bet in ETH, a more interesting token design for REP in my opinion than an approach some dapps have taken by introducing a new required currency within their ecosystem.

By Q1 2017, hundreds of dapp ideas and token mechanisms that are irrefutably worse had been funded, and soon venture capitalists had been replaced by the global retail public via ICOs as the preferred and dominant form of early stage fundraising in crypto.

The community was clearly enthusiastic and willing to fund any new decentralized, tokenized attempt to compete with existing industries and companies.

Not only were participants optimistic about the future of Ethereum and its dapp ecosystem, but they also claimed to very positive about their current state.

I believe Augur is great example of the chasm that has become more clear between expectations and reality. As stated, Augur launched an early, test version of their product before Ethereum actually launched. Augur’s actual launch just happened just 3 months ago in July 2018, over 3 years later. In the last 24 hours, Augur has had less than 50 users, 106 transactions, and about $10,000 in volume.

At dapp number 48 out of 970 when ranked by users, Augur’s minimal usage metrics are not an outlier among ethereum dapps. The top used Ethereum dapps remain decentralized exchanges and games and no dapps had over 2,000 users or 10,000 transactions within the last 24 hours.


Despite new dapps launching, global dapp activity has remained relatively flat over the last year, never exceeding 50,000 users.

When comparing the usage of dapps across platforms, you can quickly find alternative ecosystems like EOS that are currently displaying more usage than ethereum. The weaknesses in comparing dapp metrics across platforms like ethereum and EOS have many parallels to the comparisons made earlier between transaction counts across bitcoin and ethereum.

Casper and Ethereum’s Move to Proof of Stake

Since inception, one of the most critical, protocol level events on the Ethereum roadmap has been the shift from a Proof of Work consensus and security model to Proof of Stake. In June 2016, Vitalik predicted this shift would occur in early 2017.

Data source

In Q1 2017, Casper was not live, but the community was quite optimistic it would at least be live by today.

Eighty-three percent were wrong, it’s now Q4 2018 and proof-of-stake is not live on Ethereum. Casper research remains ongoing.

Scaling with Layer-two Networks

Bitcoin, ethereum, and nearly every blockchain project is researching scaling the network through layer-two networks. In Q1 2017, 87 percent of the community thought that Raiden would be live on ethereum by the end of 2018, while 69% thought Lightning would be live on bitcoin.

Bitcoin now has over 10,000 Lightning channels, while Raiden is not live on Eehereum’s main net (and now has a token, RDN, which had an ICO). Ethereum dapps including Funfair and Spankchain have however built dapp-specific scaling solutions and research on generalized state channels is ongoing by several parties.

Public Attention and Growth

In many of the easiest ways to measure however, participants were largely right to be bullish.

After the price of ETH spent much of 2016 above $10, the price of ether was back under $10 in Q1 2017 and global Google search interest was down following the chaos of The DAO and ETC.

  • In March 2017, ETH’s price set an ATH of $50.
  • In June 2017, search interest exploded and ETH’s price hit $400.
  • In January 2018, search interest surged once again, and at the peak of the bull market, ETH hit $1,400.

If you had bought ETH (with dollars) at any point between the ICO and mid-January 2018, you would have had a profitable trade (if you sold at the top). If you bought in the ICO (at $0.31), you would have returned 451,500 percent (better than equity in Coinbase today at a $8 billion valuation compared to its $4 million seed round, and ETH with public market liquidity).

ETH has undoubtedly been a historic investment opportunity. Compared to many traditional and even crypto asset alternatives, it has often outperformed.

On many time scales however, including in 2018’s bear market (2014’s which it wasn’t around to experience), it has actually severely underperformed.

Both holding $ (as many ICO treasuries now realize they should have done) or even BTC would have been vastly superior strategies in 2018.

In conclusion

Ethereum has clearly fallen short of technical expectations over the last 18 months.

In all reality, the bar of expectations was simply set far too high by un-savvy retail investors with dollars and tokens in their eyes. The Q2 2017 survey article alluding to the inevitable pop that Spongebob saw coming from stupid inflated tokens was also simply bound to happen.

Perhaps we should be thankful it happened quickly within the last 18 months and now we can enter a period like 2014 and 2015 where there is more focus on building than trading (or at a minimum it can help filter out the good traders from those who good lucky with ‘diversified exposure’ in a bull market).

Much like bitcoin companies benefited from the building heavy period of 2014 and 2015, hopefully ethereum and its dapps can benefit heavily in the coming years from the tech built in 2018’s bear market. Hopefully the price depreciation and forthcoming ICO regulatory actions will further help shape the design of the next wave of projects, fundraisers, and token mechanisms.

To see the contrast between Q1 2017 sentiment and today, help CoinDesk Research by taking the Q3 2018 sentiment survey.

Disclaimer: The author has short exposure to ether, with rationale described in this thesis. Disclaimer.

Rusty ether image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

DocuSign Will Add Ethereum Blockchain Integration to Verify Signatures

DocuSign Will Add Ethereum Blockchain Integration to Verify Signatures


docusign ethereum blockchain

San Francisco based DocuSign has announced the integration of the Ethereum blockchain into its electronic signature and transaction management service.

The company, which currently has over 400,000 paying customers, will now have an option for customers to have evidence of a DocuSigned agreement automatically recorded on the Ethereum blockchain. This option will be an alternative to the company’s native system for verifying signatures and is poised to be a natural fit for customers who want to have evidence of their agreements in a neutral environment.

Ron Hirson, chief product officer at DocuSign, stated in the release:

“For customers that opt-in, DocuSign will compute a one-way cryptographic hash fingerprint for every completed transaction, and write the value to the Ethereum blockchain — the most popular blockchain for smart contracts in our view.”

He went further to explain the hash will act as “tamper-proof evidence for the transaction” that “enables any completed document to be validated independently. And by using the Ethereum blockchain, that third party evidence for a transaction is accessible to anyone.”

The company has been researching on smart contract since it first collaborated with Visa, creating one of the first public prototypes. The prototype, which was developed in 2015, was a proof-of-concept that brought together secure contracts and payments made online via a connected car prototype developed by Visa for car-based commerce.

At the time, Hirson said:

“This proof-of-concept makes it easier and faster for customers to get out the door in their new car by bringing together smart contracts and payments so that customers can electronically sign all pertinent documents and seamlessly pay in one fully digital experience.”

The company has also joined the Enterprise Ethereum Alliance, as it hopes to continue innovating in the space. DocuSign recently relaunched a new developer center.

In a tweet shared on Oct. 13, the company also unveiled other new product features including Intelligent Insights and mobile document scanning into its operations. According to the report, mobile document scanning, which was released to iOS devices last year, is now compatible with Android devices.

This allows you to scan any document and then edit, crop, and resize them before importing them into DocuSign for your signature. Intelligent Insights is another feature that uses AI-based search and agreement analytics to go beyond keywords in understanding agreement clauses in the way a human would, e.g., knowing that a clause about Internet cookies is a document centered on privacy, even when the keyword “privacy” is absent.

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SpankChain Hacker Returns Stolen Ethereum, Earns $9,000 Reward

SpankChain Hacker Returns Stolen Ethereum, Earns $9,000 Reward


SpankChain ICO

The hacker who stole nearly $40,000 in ethereum from adult entertainment startup SpankChain has returned the stolen cryptocurrency, the company announced last night.

According to messages posted on the company’s official Twitter account, SpankChain CEO Ameen Soleimani reached an agreement with the anonymous hacker after speaking to them on the phone.

Following that conversation, the hacker provided SpankChain with the private key to an address holding the stolen funds and then further helped the company retrieve a few thousand dollars’ worth of funds that had been immobilized during the attack.

In return, SpankChain sent the hacker $5,000 as a bounty reward, purchased the formerly-frozen tokens back from them for $4,000, and returned the 5.5 ETH the hacker had used when launching the attack in the first place.

As CCN reported, the hack occurred last Saturday when the attacker successfully exploited a “reentrancy” bug in one of SpankChain’s smart contracts. The bug, similar to the one that led to the infamous downfall of The DAO, allowed the attacker to trick the SpankChain contract into allowing them to withdraw funds, even after the attacker’s payment channel balance had gone below zero.

The hacker originally made off with $38,000 in ethereum, and the attack immobilized a further $4,000 worth of SpankChain’s initial coin offering (ICO) token, BOOTY. Most of those funds belonged to the company, who had planned a $9,300 airdrop to compensate users for their losses.

Instead, the company paid out about $9,000 to the hacker, still far less than the $50,000 the company said that it would have cost to audit the smart contract prior to its deployment on the mainnet. However, the company has acknowledged in retrospect that the peripheral costs associated with foregoing that audit far exceeded the savings.

But while this specific incident was resolved remarkably amicably, computer scientist Emin Gün Sirer‏ has warned that many Ethereum smart contracts remain vulnerable to reentrancy attacks. Subsequent hacks may not have quite such a happy ending.

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Ethereum: We Haven’t Seen the Last of the Bug That Killed the DAO

Ethereum: We Haven’t Seen the Last of the Bug That Killed the DAO


ethereum The DAO

More than two years after the collapse of The DAO thrust the Ethereum community into civil war, one of the bugs that caused that caused that black swan event continues to lurk in many smart contracts, waiting to be exploited by hackers.

That’s according to Emin Gün Sirer‏, a computer science professor at Cornell and the co-director of cryptocurrency research initiative IC3, who said that he has seen a variety of smart contracts that may be vulnerable to a “reentrancy” attack that allows a malicious user to drain ETH from a payment channel.

“BTW, I’ve seen other contracts like this one that implicitly trust the erc-20 tokens issued on top of their platform to not perform reentrant calls. I’m sure this isn’t the last episode of this bug,” he wrote on Twitter.

Sirer was commenting on the news that SpankChain, an adult entertainment startup whose platform runs partially on Ethereum smart contracts, had been hacked for nearly $40,000 worth of cryptocurrency over the weekend.

As CCN reported, the company said that the hacker used a reentrancy attack to siphon 1165.38 ETH out of the smart contract over a series of transactions. In short, the attacker used a malicious smart contract to trick the SpankChain contract into believing that the attacker could withdraw funds from the payment channel.

The firm explained:

“The attacker created a malicious contract masquerading as an ERC20 token, where the ‘transfer’ function called back into the payment channel contract multiple times, draining some ETH each time.”

ethereum

As both Spankchain and Sirer noted, the attack was similar to the one that crippled The DAO, a decentralized venture capital fund that long held the record for most funds raised by an initial coin offering (ICO).

Worth as much as $150 million at a time when the total market cap of ethereum was still far below $2 billion, The DAO held nearly 15 percent of the total ETH supply on June 17, 2016, when an attacker stole 3.6 million ETH — today worth nearly $815 million — by exploiting its vulnerable smart contract.

We all know what happened next: a series of futile attempts to recover the funds, the infamous chat room conversation, and the contentious hard fork that resulted in the creation of Ethereum Classic.

Now, more than two years later, Ethereum has largely put The DAO hack in its rearview mirror. The ethereum price, which plunged as low as $6 in the months following the hack, now stands at $230. Hundreds of blockchain startups have used Ethereum to raise billions of dollars through ICOs, and thousands of developers are building decentralized applications (dApps) that run on the platform.

However, though the consequences may not always be quite as serious as they were on that infamous morning in June 2016, the bug that permanently altered the cryptocurrency landscape appears determined to continue to rear its ugly head.

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This Month in Crypto: Gaming on the blockchain, London School of Economics, Sergey Brin, and more

This Month in Crypto: Gaming on the blockchain, London School of Economics, Sergey Brin, and more

A curated selection of meaningful moments in July that are bringing us all closer to realizing an open financial system for the world.

Fuel Games, world’s first blockchain based eSport, launches with presale
Gods Unchained, a multiplayer strategy game, will leverage blockchain technology to offer gamers trust-free ownership of the items they buy or earn in games. “As the games industry switches to asset-driven revenue models, players have a more urgent need than ever for guarantees about the value and tradability of those assets,” said James Ferguson, co-founder and CEO of Fuel Games, a Coinbase Ventures-backed startup.

London School of Economics launches online course
For over one hundred years, LSE’s motto has been to “understand the causes of things.” In service of its mission, the university is launching an online course next month, Cryptocurrency Investment and Disruption. Over six weeks, students will “explore how cryptocurrencies and blockchain will shape the future of money, society and industries.”

CFA exam adds crypto and blockchain topics
CFA Institute, which has helped train more than 150,000 financial professionals, is adding topics on cryptocurrencies and blockchain for the first time next year. Material for the 2019 exams will be released next month, giving candidates their first opportunity to start logging a recommended 300 hours of study time. According to a July 16 story in Bloomberg, the CFA added the topics, part of a new section called Fintech in Investment Management, after people in the industry demonstrated an increasing amount of interest.

Learn Plasma is a new resource for people curious to learn more about Plasma, an Ethereum scaling solution. Vitalik Buterin shares his latest post in a series on STARKs, a privacy-enhancing cryptographic building block. In June, the Ethereum Core Developers announced they would combine two scaling initiatives — Casper and Sharding — into one: unofficially named Shasper. V2.1 of the design is now available. Bitcoin developer Pieter Wuille submitted a Bitcoin Improvement Proposal (BIP) for a Schnorr-based signature format, which, if implemented, would help improve efficiency and privacy.

ICO volume in the first half of 2018 is already double that of 2017
PricewaterhouseCoopers and the Swiss Crypto Valley Association partnered on a report around the volume of initial coin offerings (ICOs). “In the first 5 months of 2018, a total of 537 ICO’s with a volume of USD 13.7 bn have been closed successfully — which is more than all pre-2018 ICOs combined,” the report states. “The US, Switzerland and Singapore remain key global ICO hubs, however, over the past months, the UK and HK gained significant ground.”

G20’s Financial Stability Board shares how it will monitor crypto assets
In this month’s G20, the Financial Stability Board (FSB), an international body that monitors and makes recommendations about the global financial system, shared several metrics that it will use to keep an eye on the developing crypto markets.

Google co-founder Sergey Brin outs himself as a crypto miner
At July’s Blockchain Summit in Morocco, Google’s co-founder Sergey Brin shared that his “side hustle” is mining ether (ETH) alongside his 10-year old son. “A year or two ago, my son insisted that we needed to get a gaming PC,” said Brin, according to a recap in Business Insider. “I told him, ‘Okay, if we get a gaming PC, we have to mine cryptocurrency. So we set up an Ethereum miner on there, and we’ve made a few pennies, a few dollars since. . .I see the future as taking these…research-y, out-there ideas and making them real.”