The move away from proof-of-work towards proof-of-stake is a major one for Ethereum and its users, as well as the entire cryptocurrency space. For the miners in particular, there will be some questions that need answering, but in the meantime, mining Ethereum is still hugely profitable.
It is not only the growth of the cryptocurrency markets and the explosion in price for tokens — Ethereum reached a new high of over $2,000 — but the smart contract chain is also cashing in on the success of DeFi.
As a result, Ethereum miners saw record revenues of over $830 million in January 2021, levels not seen since the first few weeks of 2018 before Ether, Bitcoin and the wider cryptocurrency markets crashed after the spectacular highs of December 2017.
Better than Bitcoin
As the major proof-of-work coin, and the most popular, Bitcoin has always been a benchmark for miners. However, the recent successes of Ethereum have put Bitcoin in the smart contract coin’s dust.
Philip Salter, head of operations at Genesis Mining, told Cointelegraph that while mining Ethereum is “super profitable” at the moment, current miners and potential newcomers must still be aware of the initial barriers to entry.
“The margins you can make with ETH are much higher than the margins you make with BTC. However, that doesn’t mean that it’s more profitable overall. The reason is that ETH mining hardware is more expensive than BTC mining hardware, so you have a higher initial cost that you need to break even on.”
The pseudonymous founder of Pylon.finance, OxGrimReaper, also weighed in on the current mining climate and the current superior profitability of Ethereum mining, telling Cointelegraph:
“ETH is the most lucrative mining opportunity at the moment, even more so because of a GPU and hardware lockout in retail. Plus we’re in the middle of Chinese new year, meaning no production happening in factories. The entry barrier at this moment is as high as it’s ever been.”
The move to ETH 2.0 is a hot button topic, and it is on the minds of miners, but so it has been for some time now.
Salter added that miners will carefully weigh-up improvements to their operations as Eth2’s development continues:
“Ethereum switching to PoS has been a possibility for a very long time, but it always seems to be about two years down the road. Miners will assess the risk of this happening before they do any investments into new hardware.”