The price of Ethereum has dropped significantly in recent months, following all-time highs.
At the start of January 2018, Ethereum was going for over $1,360 a token.
The price fluctuated in the following weeks, before starting a steady decline on 20 February – when Ethereum was valued at $960.
It then reached a low of $378 on 1 April, and has been hovering around the $400 mark since.
While this may cause concern among those who invested in the cryptocurrency, it is a non-issue for users who purchased Ethereum at much cheaper prices, and those who believe the price will go up in the future.
One group with a more immediate problem, though, is the Ethereum mining community with GPU mining rigs – of which we are a member.
MyBroadband’s Ethereum mining rig – sporting six AMD Radeon RX 580 4GB cards – started running in June.
With the fluctuations in the price of Ethereum and the number of people buying rigs and joining mining pools increasing, we started out well, headed to “not-so-good” territory, and then bounced back to making money.
With the recent drop in the price of Ethereum and the increased mining difficulty – as more miners compete for block rewards – our mining rig is currently not making us any money.
Our payouts take place every time we earn 0.2 ETH, with the latest payout taking 28 days of work to earn.
This means we are currently making around 0.2 Ethereum per month, which equates to R950.
The electricity cost of running the rig is R1,300 per month, which means the machine is now in negative territory.
This is compared to its performance in January 2018, when we were forecast to make around R7,400 per month.
A longer-term view of the mining rig’s performance shows just how quickly the Ethereum returns have dropped.
When we started mining, the rig made its first Ethereum in under 10 days.
The time it took to earn 1 ETH then began to increase as mining went on, resulting in the payouts going from one Ethereum token in just over 200 hours of work in June, to over 800 hours by September.
As stated above, the situation is much worse as of this month.
A potential immediate solution is to switch the rig to NiceHash, which lets users mine altcoins that are then converted into Bitcoin.
With Bitcoin’s price also suffering from a price drop in recent weeks, however, the revenue generation of the switch will have to be calculated to ensure it covers electricity costs.
If this is not the case, the rig may have to be shut down – and gamers are already clamouring for its powerful graphics cards.
Another major issue facing miners is the blockchain’s potential move from a pure proof-of-work consensus to a hybrid system, with proof-of-stake elements included.
This could significantly lower block rewards for miners, making mining even less profitable.
Major tech publications have been less than optimistic in their view of mining rigs, with Motherboard stating that building an Ethereum mining rig has not been worth it for months.