Mining Ethereum is unprofitable right now, but this could lead to a price rally

26 Oct, 2018
by Arthur Sillers
News
Mining Ethereum is unprofitable right now, but this could lead to a price rally

According to Long Hash, Ethereum’s hash rate has fallen 12% since August, likely due to falling Ether prices making ETH mining largely unprofitable.

Long Hash points to the ETH’s plummet from $600 to $200 as significantly decreasing the profitability of mining on Ethereum, which in addition to the cost and maintenance of mining rigs as well as the cost of electricity, makes it increasingly difficult to operate a profitable mining operation. Long Hash also points to the fact that the Ethereum team is lowering block rewards from around 3 ETH to around 2 ETH, which directly makes mining less valuable.

Long Hash did rough calculations on the overhead of running a competitive mining operation against the current ETH price, and found that on average, most miners are probably currently losing money, and that Ether will have to rise again to around $445 until miners on aggregate will break even.

With these numbers, its no surprise that the hash rate of ETH is falling, with decreasing rewards and increases in the cost of operation making the potential profits slim to none. The takeaway for Ethereum enthusiasts shouldn’t be pessimistic however, because decreased mining activity means decreased Ethereum output, which will lead to a rebound in price according to basic supply and demand principles.

Long Hash concludes their report by saying, ‘no one knows exactly when this will be, but if you want to make an informed estimate, keeping an eye on mining costs provides valuable clues.’

 Read more: Armenia opens $50 million Bitcoin and Ethereum mining farm Armenia opens $50 million Bitcoin and Ethereum mining farm, Pressure on Constantinople hard fork 'putting the whole Ethereum project at risk?'

Follow Chepicap now on Twitter, Telegram and Facebook!

Read more about: Ethereum (ETH)

Poll

Will lowered mining output lead to an ETH rally soon?

(1 votes)

Add a comment

Check out the latest news

You will be logged out and redirected to the homepage