ETH Mining Rewards Reached A Record-Breaking Level

The second-largest cryptocurrency to date, Ethereum, has managed to climb up with 180% since the market crash from March 2020, caused by the COVID-19 pandemic. Ethereum miners also become more active after March, as their profits increased overtime, reaching an all-time high.

In regards to the all-time high record, Glassnode published reports on gas usage for transaction verification, as well as miners` profits. The metrics even surpassed the late-2017 crypto boom values, which may indicate a future climb for the altcoin leader.

Source: Glassnode

However, collected data reveals a 25% decrease in network difficulty and hash rate. This indicates that Ethereum’s blockchain can process more transactions with the same amount of computing power needed for transactions verification under the proof-of-work consensus algorithm. 

And despite that Ethereum mining rewards remained rather constant since February 2019, the decrease in hash power means more of the gas fees are going directly to miners. Ethereum miners`s revenue is now between 16% and 19% from transaction fees for validating transactions. In comparison to previous periods, even during the peak price levels of Ethereum from January 2018, miners could barely reach 15%.

The data shows mining infrastructure providers are increasingly receiving better rewards. This is due to the growth of genuine activities on the Ethereum’s blockchain.

Gas usage also increased dramatically, with Ethereum recording an almost double gas price increase since its January 2018 levels. The most probable reason behind the gas price peak is that Ethereum went from the simple send/receive operations between wallets and exchanges to utilizing smart contracts, and it is now turning to more complex and expensive operations, due to DeFi activity.

The all-time highs rewards come amid the much-anticipated shift toward a staking algorithm for transaction validation – the ETH 2.0. The update would introduce significant changes to the number of transactions processes, as well as the mechanism of how blocks are generated within Ethereum’s blockchain.