Why is Ethereum being mined less (Why is the quantity of Ethereum being mined decreasing)?

08/13/2023 07:00 • Tech Ticker • 84 views

Why is Ethereum being mined less? Ethereum is being mined less because the Ethereum network is highly centralized with a large number of miners worldwide. In the current situation, many mining pools choose to directly transfer Ethereum mining power to their controlled wallets for mining activities or speculative trading of their own assets (such as using Bitcoin to purchase Ethereum tokens, etc.).Although many people are discussing this phenomenon, some still believe it is a big misunderstanding and do not have an understanding of this matter.

Why is the quantity of Ethereum being mined decreasing

Editor’s Note: This article is from Bit Information (ID: bitcoin8btc), author: NickChong, translator: Kyle, published with permission from Planet Daily.In recent weeks, Ethereum mining difficulty has increased significantly. With the rise in ETH prices and the short-term recovery of Ethereum’s price, over 30 million blocks have already been mined, which is undoubtedly a good thing for miners. But why is Ethereum being mined less now? The answer may be that people increasingly see Bitcoin as a store of value and a monetary network. If we consider the current Bitcoin as a relatively stable and decentralized encrypted asset, it will become an important part of the future digital financial system – as the underlying blockchain technology infrastructure, Bitcoin may continue to exist. However, when you consider Bitcoin’s growth trend, you will find that its growth rate is fast, and the current situation may change.Nevertheless, Ethereum is still in its early stages and is experiencing significant scalability challenges. However, Ethereum is still attractive and receives widespread attention due to various issues, including performance, composability, and security.Although Ethereum does not have any practical use case, the number of computing devices used in the Ethereum network has shown a significant increase. According to Messari data, Ethereum’s hash rate has surged to about 4 exahashes (EH/S) per second, and Ethereum uses the most widely used Proof of Stake (POS) algorithm.For these reasons, the total revenue of the Ethereum ecosystem has been steadily increasing over the past few months, dropping from around $2.89 in 2018 to a high of $3.68 per day on June 1, 2020. Additionally, the surge in on-chain activities on the Ethereum network since the beginning of this year has caused mining profitability to plummet, and this indicator has remained at a low level since early May.However, compared to the end of November last year, this index has slowed down. In fact, according to Glassnode data, as of mid-July, the sales revenue of Ethereum mining manufacturer Ethermine has declined by over 20%. It is reportedly an average selling price of approximately 200 Gwei for Ethereum mining machines per block. (Note: The price in May was $0.0002, and the quotation at that time was $0.01).

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Why is Ethereum being mined less (Why is the quantity of Ethereum being mined decreasing)?

Why is the quantity of Ethereum being mined decreasing

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