Interest in mining has increased. Cryptocurrencies are taking over the world

I got into mining in 2017. In 2020, when rates dropped, I got out. What the hell am I doing here then, you ask? If you read the last post, I wrote that if I didn’t sell some of the cards, I’d put together a couple of farms and put them to drown the dacha. Of course I didn’t write that for nothing: I had handicapped cards that were unrealistic to sell. Basically they were RX 580 4 and 8 GB, a few 1050 Ti and a couple of tortured 1070 Ti. I’ve built two farms out of them, which to this day stoke a small country house from autumn to spring. It looks like this. Monsters without shrouds, valves not native – in short, “made of shit and sticks”. To be honest, it is even embarrassing to post such a picture.

The old mining farm.

But if cleverness worked better, it would be something like this.

Unusual use of mining farms

All this time I’ve been hanging out in 2Miners chats, because they are certainly the most adequate chats on mining topics on Telegram, if not the only ones. The price of crypto has risen and fallen, the rise has always attracted a new wave of miners, and the more dumb ones, pardon my French. Many newbies don’t want to understand anything at all. People used to sit on pages like this one and monitor network readings, but now people hardly understand what a bat file is. It’s good that the backbone of users in chat rooms remains. As the authors of 2Bitcoin have written many times, cryptocurrencies are good because everything is transparent and everything can be seen. I will try to write in simple language so that I can be understood by the widest possible audience.

Ethereum network hash rate chart

We take the Ethereum network hash rate graph. We press the “All time” button. The graph shows the hashrate, i.e. the amount of hardware that is mining Ethereum now and has mined before. I came in 2017: the hash rate was just over 30 Th/s then. In 2020, when I sold almost all my equipment, the hash rate was 150 Th/s, which is five times more than when I started. Just at the beginning of summer 2022 the hash rate was over 1 Ph/s, which is already thirty times more than when I started. Just think about those numbers! No wonder, that in 2017 mostly geeks were mining, now there are 30 times more miners and everyone is mining: from housewife to car wash owner. Forgive me sinfully if I offended anyone, but that’s how it is.

Ah yes, the juicy moment everyone has been waiting for - about my pain. I've sold my equipment in 2020, Antminer S9 and L3+ asics were sold reluctantly for 5-10 thousand rubles, read "self-delivery" or "for a spider". Man, I was biting my elbows, when exchange rate went up in 2021, and the Asics started to cost 100k and more. Failure. Okay, but good luck in love.

Ether moves to PoS

You’ve all read that Etherium is moving to Proof-of-Stake. That’s some foul language for a lot of people, so let’s try it in simple terms. THERE WILL BE NO MORE MINING OF ETHER! AND YES, IT’S AN ASSHOLE!

OK, don’t panic, there are other coins, and life doesn’t stop there. On or about September 14, Ether mining will be doomed. The death sentence is counting down here. And they put a report in there for some reason before the complexity bomb is launched, which makes many people think that Ether mining will go on for a long time, only harder. No, it won’t. See the second timer where it says Mainnet. When the clock stops ticking, that’s when “we’re done”.

The countdown to the merger on the Etherium network

In general, this article has all the information, of course, but it is a lot of letters, not everyone can digest. I wanted to share my opinion on what will happen after this event and what to do in general, but first let’s understand what’s going on in general right now.

How much money are video card miners earning

How much are Etherium miners earning

Right now, Etherium miners are earning more than Bitcoin miners. Can you imagine? Etherium miners = video card miners, because a good 95 percent of video cards mine Etherium.

Yes, there are some under-axis miners, but these are just trace values, they are not important at all.

Counting the money, everybody loves it. The block time on the ETH network is 14 seconds. This means that roughly 6200 new blocks are found in the network per day. For each block the miners get at least 2 ETH, taking into account the additional remuneration for transactions and other things it comes to 2.1 ETH. This is not secret data: 14 seconds and 2.1 ETH I took from the Ether page in 2CryptoCalc. You can find the same data from any other source.

The data for mining on the Etherium network

Let’s multiply 6200 by 2.1 and then by the rate of Ether of 1500: we have 6200 x 2.1 x 1500 = 19 530 000 dollars.

Nineteen milliards are earned by Ether miners per day. How much Bitcoin miners earn per day, I will not write, strain your brain and multiply the three numbers, it is useful. But the main point is that this number will be LESS.

How much do Etherium Classic, Ravencoin, Ergo miners earn

Let’s calculate how much video card miners earn on other coins and algorithms. Go to 2CryptoCalc, click on all the coins in a row, take the value of the reward per block and block time, the coin rate look at Coinmarketcap and multiply it all. Don’t just take ZEC, ZEN, CKB, GRIN, MWC – they are mined on asics, as well as Monero, it’s on processors. I used a regular calculator to do the calculations, if anything.

Miners earn per day:

• Ethereum Classic – $750,000
• Ergo – $200,000
• Ravencoin – $135 thousand
• Flux – 50 thousand dollars
• Neoxa – 45 thousand dollars
• Bitcoin Gold – 20 thousand dollars
• Beam – $10 thousand
• Firo – $10 thousand
• Cortex – 5 thousand dollars.

The rest I did not even take, there is not much money there.

How much do all video card miners earn now a day?

Let’s add all values we have. In total we have Ethereum + all others = 20 755 000 dollars per day, of which 94% comes from Ethereum, and 6% from all other coins. I drew a special pie chart. It is called Pie in English for a reason.

Share of Ethereum miners compared to other cryptocurrencies

Consider the income of video card miners as one big pie. The size of this pie changes primarily if the price of the cryptocurrencies that comprise it changes. The pie can also change if the block time or reward per block changes. These are rare events, block times almost never change and the block rewards of each cryptocurrency decrease every few years, often referred to as halving. Let’s think about what will happen to the pie when Ethereum mining ends, and this huge chunk of blue will be taken from us in a heartbeat.

How much will miners earn when Ethereum goes to POS

Uncle Vitalik Buterin will take a big chunk out of the pie on the 14th, namely a chunk of 94 percent. That’s it. It will be gone. There will only be $1,225,000 a day left for all the miners who use video cards. There is no complicated arithmetic, no need to think about what algorithms the miners will migrate to and so on. Was almost $21 million, will become $1 million.

Etherium creator Vitalik Buterin

What to mine after Ether?

It’s not hard to guess that most miners will switch to these 3 coins: ETC, ERGO, RVN. They bring together more than 1 million dollars per day: Ethereum Classic – 750 thousand dollars per day, Ergo – 200 thousand dollars per day, Ravencoin – 135 thousand dollars per day.

If you are mining to accumulate Bitcoin, 2Miners has payouts directly in BTC on some coins. This is profitable and also saves time and effort to exchange. Right now BTC payouts are available for ETH, ETC, ERGO. As far as I know from chat, BTC payments support will be added soon for Ravencoin as well.

It is impossible to guess which will be more profitable after the merger – the move to POS. Once Ethereum will go to POS, you will have to choose one of coins and mine it for few days, until everything will be settled. Then it makes sense to go to 2CryptoCalc.com, enter your equipment and decide what coin to mine and if it is profitable for you at all.

Maybe for the first few days you should choose some not so well known coin like Neoxa, Aeternity or Cortex. Those coins are the last ones which are in the hands of industrial miners. Go to the main 2Miners.com and think about what kind of “safe haven” you can swim in.

Misconception 1. The profitability of mining other coins is the same as Ether, I will mine other coins

Nah, guys, it doesn’t work that way. You have to realize that now you are looking at yield of mining on your GPU, and you are thinking: why bother, you see yield of RVN is the same, and of AE is even higher than of ETH. If Ether goes away, I will mine RVN. Oops. I can mine RVN, no doubt, but the profitability of mining RVN will fall. Let me explain. “The pie rule” applies to each individual coin just as much as it applies to all coins together.

The whole RVN pie is now $135,000 a day, and it is shared by a small group of miners every day. When Ether mining ends, the millions of video cards that have been mining it will find themselves free. Where do you think they will go? That’s right, to all the other coins, including Ravencoin. There will be more competitors to mine RVN, and the size of the pie will remain the same. The profitability of RVN mining will sag a lot. In normal words, the profitability will rocket to the bottom.

Ravencoin RVN mining data

Delusion 2. Mining calculators lie.

Are mining calculators lying and should not be used? No, calculators do not lie, they just do not predict the future. A calculator is a tool to be used in the here and now. It doesn’t know what will happen tomorrow, in an hour, or what the yield will be on Ergo when Ethereum goes to POS. Use calculators to determine what to mine in the here and now. Trying to use a calculator to predict what will happen after the merger is pointless.

2CryptoCalc calculator interface

Delusion 3. Other coins will increase in value. The profitability of mining other coins will increase

Ahhhh god, how many times can you hear this nonsense. All these questions in chat like “Now Ether will go to POS, and then everyone will mine Neoxa (conventionally) and its price will go up”. It won’t, guys. Whether 100 people or 10 thousand people mine Neoxa will not change the size of the daily pie. Right now 100 people are selling Neoxa every day, and 10 thousand people will be selling it. Where does the price increase come from? The price only goes up if the coin is BUYING, and miners are sellers who sink their own ships.

Neoxa mining pool statistics from 2Miners

What can save the miners: investors will believe in the coin and start buying it up en masse. Or, say, they will sign a deal with Epic Games and the whole world will know about Neoxa. This is possible. But it has nothing to do with what happens with Ether.

Misconception 4: The profitability of mining will drop by a factor of 20

Right now we have 94 percent of miners mining ETH, 6 percent mining everything else. Many people think that all ETH miners will switch to other coins, consequently the profitability will drop 15-20 times. That’s simply not possible. Most or even most of the Etherium miners will simply shut down their equipment for good. I think the profitability of mining on video cards will drop 8-10 times, but definitely not 20 times: I will explain why further on.

The author in “What to mine after Ethereum goes to POS?” gives a great definition of the mining process:

Mining is the process of making money with your equipment.

No one will mine “at a loss”. A miner not only has revenues, but also expenses – primarily electricity.

In Russia, for example, the average price per kWh is 4 rubles. I, for example, have a 1070Ti card (sorry, no newer card). Now the calculator, it comes out almost $0.7 per day, that is 45 rubles, while it consumes, roughly, 135W. During the day raises 13 rubles.

Profitability of mining with Nvidia GeForce GTX 1070 Ti

45 rubles of income, 13 rubles of expenses. If the profitability drops by three times, I’ll survive, but the card will work already “for the socket”. If the yield drops by a factor of four, there is no point in mining.

OK, let’s look at the fancy Nvidia 3080 Ti.

The profitability of mining with the Nvidia GeForce RTX 3080 Ti

The 3080Ti is, of course, a more modern and efficient card. 173 rubles a day income and 28 rubles expense. As you can see, the owner of such a card, having an average Russian tariff, will survive a 6x drop in income and will earn a couple more rubles.

In my opinion, it will all depend on the price of electricity. Those miners that it is expensive will have no choice: they will have to shut down. Remember, there are no such sweet tariffs as in Russia almost anywhere in the world, especially because of the events of 2022. People in many countries will disconnect. The disconnection of miners has happened before, there is nothing wrong with that. It’s just that it hasn’t been as massive as expected now.

Look what happened to Ethereum in 2021. An almost two-fold drop in the computing power involved in mining.

Ethereum network hash rate graph

Now let’s take a look at Bitcoin. In 2018 and 2021, the hash rate fell by a factor and a half.

Bitcoin network hashrate graph

Is it possible to predict how much yields will sag in September after the merger? Very difficult. By the way, if you mine in Irkutsk, and you have 1 KWh for 1 ruble, you can continue mining even with a tenfold drop.

The future of video card mining

I’m no oracle, and I don’t have a magic ball. It will definitely be the most memorable month for video card miners around the world. Let’s get our popcorn on, it’s going to be hot. Good thing I only have a couple of miserable freak farms. Heating season hasn’t arrived at the cottage yet, of course, but it’s unlikely I’ll be running them. There’s probably no point.

People with a free or conditionally free outlet will continue to mine. Many miners in Russia and abroad will shut down. 2Miners will now become the largest pool for video card miners. There are probably all the coins imaginable there: twenty pieces, without Ether there will be nineteen, though maybe something else will be added.

All cryptocurrencies on 2Miners mining pool

Can the situation improve? Yes, it can of course. The cryptocurrency market is now three times lower than it was at its peak. If the profitability of mining drops ten times and then rises three times, it will only mean a threefold drop. That’s not so scary. But what if Bitcoin is worth $100,000 and pulls all other cryptocurrencies up with it? Nonsense, you say, it can’t even hold $20,000. Who knows, at one time it was worth 1, 100 and 1000 dollars, and every time they said it was just too much, and it could never grow any higher.

I humbly recommend you read my first article, perhaps it will be of interest to you and you will see in my former victories and mistakes yourself. Thanks to the editors for picking up my material again. You guys are great, even if mining is dead for me I will still be in touch with that wonderful community you built.

Join our community of miners on Telegram. We will talk about other topics there as well.