Outsiders not involved in the cryptocurrency space will often claim how proof-of-work is “wasteful” and “will be replaced by better systems”. While that may be true to a certain extent, the network hashrate of both Bitcoin and Ethereum reaches new all-time highs. Mining cryptocurrencies remains attractive, even in 2021.
Proof-of-Work Blockchains Do Just Fine
One can always argue that the electricity cost associated with proof-of-work mining is a problematic factor. This electricity has to come from somewhere, and renewable sources can only contribute so much. Then again, all computer work is wasteful in a way, yet our society may not be able to cope without this technology. Finding a solution that makes everyone happy will never be possible.
Statistics-wise, proof-of-work mining is more popular than it has ever been. That is, assuming one looks at the mean hash rate for both Bitcoin and Ethereum. The two leading cryptocurrencies by market capitalization note an ongoing increase in their respective network hashrates. A remarkable trend to behold, albeit it is not too surprising.
As Bitcoin and Ethereum remain in price discovery territory and note new all-time highs, mining will remain popular. For Bitcoin, proof-of-work will remain the only consensus algorithm for decades to come – unless something drastic happens. As such, miners will always be able to contribute to the network in exchange for block rewards.
Ethereum, on the other hand, will make the switch from proof-of-work to proof-of-stake. It is part of the ongoing upgrade to Ethereum 2.0, although this process has no official timeline or end date. Once the upgrade completes, it will no longer be possible to mine Ethereum ever again. Even so, miners keep pushing the hashrate higher until the transition happens.
New GPUs Are A Blessing
One aspect working in favor of Ethereum miners is the new line of GPUs being released. Both Nvidia and AMD put their best foot forward to bring more powerful graphics cards to consumers at affordable prices. Even though most of these cards fall into the hands of scalpers, some miners will pay close attention as well.
Contrary to previous generations, the GeForce 3090 is now making its way to high-end laptops without most of the noise and heat of this small form factor. Thanks to the new cooling solutions, such a card can run relatively cool and quiet even in this small frame, allowing proof-of-work enthusiasts to mine Ethereum or other cryptocurrencies. Once these laptops hit the markets, the crypto mining landscape may change forever.
Just because these upgrades exist does not mean everyone should start mining Ethereum or other altcoins. The upfront cost of these cards – or laptops with the GPU – is very steep, and recuperating the initial investment can take a while. Always calculate how much money you can make and deduct all costs and fees from that amount. If breaking even takes too long, it may not be the best option for you.