Ethereum fees have reached 5,000 eth a day, worth about $1.3 million, following a significant rise in transactions to near 1.2 million a day.
That’s closing in on half the block reward that miners receive, about 13,000, so making their daily block reward therefore near 20,000 eth.
Despite this significant increase in miners’ income, the hashrate remains completely unchanged, making it very puzzling.
Puzzling because although ethereum’s price has changed and quite a lot, and now miners’ income is also changing through fees, the hashrate appears to be completely unresponsive.
It’s not too clear why the hashrate appears to not care much about a substantial rise in income with miners previously saying it takes $150 to mine one eth.
With rising profits, you of course would expect a rise in competition, and thus hash, but that hasn’t quite been the case for eth.
The reason may be that industrial level mining requires significant upfront investment which is then recouped over years.
As ethereum is to move to proof of stake, miners don’t have any medium to long term investment certainty, and therefore it looks like there isn’t as much competition as in bitcoin.
In bitcoin miners probably operate at just about in profit with some speculation regarding future price movements which can make current at cost mining very profitable in some months.
While in eth the only real competition may be from hobby miners who just want some eth instead of wanting to run a whole business.
For them price is probably too low as energy costs are a lot higher, about 20 cent versus 5 cent for industrial miners.
Meaning eth’s price needs to double for mining to be profitable on a laptop gpu, but games can start whining even before then if these 5,000 eth a day fees hold as it would make maybe even $400 a profitable level.
That’s especially if you add the speculative element of how much that eth will be worth, rather than is worth, which even now should start making mining a profitable endeavor even for dormroom gamers.
Such distribution of mining may then lead to less sell pressure from industrial miners as gamers would probably just hold it rather than market it to cover costs.
That withdrawal of supply may then itself affect the price, and so you get a cycle.