The rewards for those who mine Ethereum recently reached an all-time high. This event occurs amid the rebound in the price of cryptocurrencies.
According to a study by blockchain analytics firm Glassnode, the rewards for those who mine Ethereum have reached a peak. Likewise, the study shows that the blockchain network of this cryptocurrency has greater stability than in 2018, the year in which it was at its best.
In this way, the miners of the second largest cryptocurrency are obtaining great results with the fees. On the other hand, the network’s hash rate has decreased, which means less time to search for valid blocks.
According to data from the Ethereum network, the growth of this crypto asset could continue to increase. The profit limit has been raised, which could lead to a significant hash rate increase in the coming weeks.
Meaning of Increased Rewards for Mining Ethereum
The recent increase in Bitcoin’s price is dragging the other cryptocurrencies behind it. However, Ethereum’s ability is not limited to being in the shadow of the pioneering digital currency.
Besides, the data show that the growth and maturity of the Ethereum blockchain network are better than in 2018 when it recorded highs around USD 1,400. Taking these two aspects into account, it would not be surprising if the current growth pointed there.
Another important fact is that, although the fees of the network are high, the difficulty has fallen significantly due to the drop in the hash rate. The reduction in hash rate is 25% compared to the summer of 2018.
Likewise, it is possible to conclude that, the lower the hash rate, the greater the amount of Gas in reward that miners receive. The downside of this is that a low hash rate could lead to certain levels of network insecurity.
Advantages Compared to 2018
In 2018, when this cryptocurrency reached its peak, the rewards for mining Ethereum did not exceed 15%. However, they now range from 16% to 19%, leaving expectations open for a major rally.
Regarding the limit of Gas used, there has been a two-fold increase, compared to the year 2018. This Gas increase could have its origin in speculation with decentralized applications. Lending and earning DeFi applications are moving like never before, which could directly impact the price and further increase the rewards for mining Ethereum.
No One Knows When Things Will Change
All this logic in Ethereum’s performance is within the framework of the Proof-of-Work (PoW) protocol, which the ETH 2.0 update would replace. However, this expected renewal has suffered delays on multiple occasions.
The goal of the Ethereum 2.0 update would be to replace the PoW protocol with the Proof-of-Stake (PoS) protocol. That would bring unprecedented evolution for a cryptocurrency of this magnitude and radically change the process of mining Ethereum.
Although the intention was to introduce that update in late 2020, its developers reported that a series of errors forced them to postpone it again. Currently, the tentative launch date is in early 2021.
In this way, Ethereum mining would undergo a radical change. Instead of many devices vying to validate blocks, the network would now select them randomly.
By Alexander Salazar