Of the two most popular cryptocurrencies, have you wondered whether you should mine Ethereum or bitcoin? You most probably have, and I suggest mining bitcoin over Ethereum, and here are three reasons before my verdict.
Now let’s look at how much money you can make in a month and year by mining either Ethereum or bitcoin. To do so, we must look at a hypothetical example. I looked on eBay and found a high-end Ethereum mining rig worth $3,000, with about $1,500 in shipping costs. Let’s even forego the shipping cost and assume this is an American miner who didn’t have to fork out that much for shipping. With a hashing power of 150MH/, a 900W power consumption and average cost of $0.12 per KW/h, the cryptocompare mining calculator generated this result.
As you can see, this miner would make $2,192 in a year, while the mining rig itself cost $3,000. Now let’s run the same test, this time while mining bitcoin. I also found a $3,000 bitcoin mining rig, but you can even find a used one at about $2,500. It has a hashrate of 14TH/s and power consumption of about 1,350W.
In this case, the miner would make $6,389 in a year, more than triple what the Ethereum miner would make that year.
Cryptocurrency mining should increase in difficulty over time in order to reduce the number of coins in circulation. However, the difficulty to mine Ethereum has become so high lately that it has become unprofitable, at least to the ‘small’ miner.
Proof-of-work vs. proof-of-stake
Proof-of-work is the method by which you mine Ethereum and most other cryptocurrencies today. This method of mining requires that your computer or mining rig perform some complex calculations, and the first to solve the puzzle is rewarded. However, the Ethereum network is working on a hard fork labelled ‘Casper’, which is intended to shift from proof-of-work to proof-of-stake. With this new way to mine Ethereum, they intend to reduce mining costs, which simply means mining rigs will become obsolete. Instead, you will have to stake a particular amount of ether, whereby the more you have, the more likely you are to be rewarded.
Future value of Ethereum vs. bitcoin
While the value of both cryptocurrencies is expected to increase in the coming years, that of bitcoin is expected to rise much faster. Since you are rewarded in the coins you are mining, it would mean that bitcoin miners would earn more than those who mine Ethereum.
While the bitcoin network is trying to ease the difficulty in mining even for ‘small’ miners, Ethereum is becoming more elitist. Only those with high processing power can now make money when they mine Ethereum. Furthermore, once proof-of-stake is implemented, those with more Ethereum tokens will be at an advantage.
Therefore is much better to mine bitcoin instead of Ethereum at the moment, and all factors favour this verdict.