Ethereum (ETH) is a digital token of the Ethereum network, often regarded as "Bitcoin 2.0." It utilizes a different blockchain technology called Ethereum, where developers need to pay ETH to run applications. Like other digital currencies, Ethereum can be bought and sold on trading platforms.
Understanding Ethereum's Supply Mechanism
Ethereum's most significant drawback is its continuously increasing supply. How can an item with no supply cap serve as an investment? The price of any commodity ultimately depends on the balance between supply and demand: oversupply leads to price drops, while undersupply causes price increases. Bitcoin and Litecoin have fixed supplies—Bitcoin has a total cap of 21 million, with over 10 million already mined, and the remainder will be released over the next 100 years. In contrast, Ethereum's current supply is already over 90 million, with an additional 18 million coins generated annually. Ethereum produces 250 blocks per hour, each rewarding 5 coins (plus some transaction fees and other incentives), resulting in over 30,000 new coins daily. Therefore, Ethereum's total supply has no upper limit.
How Long Can Ethereum Mining Continue?
Every miner has pondered this question: How long will Ethereum mining last? Will mining become impossible after purchasing equipment, or will it cease before the investment is recouped? Rest assured, Ethereum cannot be mined out. Although the official design initially indicated a finite supply, Ethereum continuously undergoes forks. Whenever the supply is threatened, new forks create fresh coin varieties for miners to explore—examples include ETC and ETF. Post-fork, ETH prices often surge dramatically. Thus, miners need not worry about Ethereum's availability.
👉 Explore advanced mining strategies
Historic High in Ethereum Mining Difficulty
Cryptocurrency mining directly impacts the entire market, and increasing mining difficulty affects network operations. Miners provide crucial hashing power to secure the network, and more participants ensure a healthier ecosystem. Miners receive block rewards, similar to any other mineable currency at this stage.
For Ethereum users, cryptocurrency mining is highly appealing. When ETH prices hit $400, many invested in mining, necessitating graphics card purchases since Ethereum lacked ASIC miners at the time.
In recent months, Ethereum mining difficulty has intensified. Etherscan data shows a steady rise since January 2016, when difficulty was just under 100 TH/s. By April 2017, it reached 242 TH/s, marking only the beginning.
Currently, Ethereum mining difficulty has peaked historically at 1332.178 TH/s. Miners report that substantial hardware is now required for profitability. Notably, on July 30, 2015, the difficulty was merely 0.121 TH/s. Over two years, the escalation has been dramatic, with mining operations demanding dozens of graphics cards.
Hardware suppliers like AMD and NVIDIA have noticed a sharp increase in graphics card purchases solely for Ethereum mining. However, with ETH prices experiencing significant volatility, profitability is no longer straightforward.
This raises a critical question: What comes next as mining difficulty climbs? Mounting challenges pose urgent issues for cryptocurrency developers. Many investors hope to delay the difficulty bomb by 18 months, but whether this resolution will be implemented remains uncertain.
Frequently Asked Questions
What is the current total supply of Ethereum?
As of now, Ethereum's supply exceeds 90 million coins. Unlike Bitcoin, it has no fixed cap, with approximately 18 million new coins added annually through block rewards and incentives.
Can Ethereum ever be completely mined?
No, Ethereum cannot be fully mined due to its continuous forking mechanism. When supply constraints loom, new forks like ETC or ETF emerge, allowing mining to persist and often driving up ETH prices.
How does mining difficulty affect profitability?
Higher mining difficulty requires more advanced hardware and greater energy investment, reducing profit margins. During price volatility, breaking even becomes challenging, necessitating careful cost management.
What hardware is best for Ethereum mining?
While ASIC miners are unavailable, high-performance graphics cards from AMD and NVIDIA are popular. However, profitability depends on electricity costs, hardware efficiency, and current ETH prices.
Will Ethereum transition to proof-of-stake?
Yes, Ethereum plans to shift from proof-of-work to proof-of-stake with Ethereum 2.0. This upgrade aims to reduce energy consumption and mining reliance, potentially altering the mining landscape.
How do forks impact Ethereum miners?
Forks create new tokens (e.g., ETC), allowing miners to continue earning rewards. Post-fork, original ETH prices often rise, benefiting holders but requiring miners to adapt to new chains.