The downside to any proof-of-work-based cryptocurrency system is how the mining difficulty affects the entire network. Miners provide an important service to any cryptocurrency requiring hashpower to maintain its stability. More people mining on the network means the entire ecosystem is protected better. In exchange for their hashpower, miners receive an incentive known as the block reward. This is the same for any currency which still supports mining at its current stage.
For Ethereum users, mining the cryptocurrency seemed pretty appealing just a few weeks ago. When the Ether price briefly hit US$400, a lot of people made the conscious decision to effectively invest in ETH mining equipment. For most people, this meant buying up a lot of graphics cards, as there are no ASIC miners for Ethereum — nor will there ever be any, especially when keeping the difficulty bomb in mind. For those unaware, Ethereum will switch to proof-of-stake at some point in the future.
It is impossible to deny that the Ethereum mining difficulty has evolved over these past few months. In January of 2017, the difficulty was just below 100 TH/second, according to Etherscan, and had been rising gradually since January of 2016. However, things really started to pick up speed in April of 2017. By that time, the Ethereum mining difficulty had increased to 242 TH/second, and that was only the beginning.
Today, the Ethereum mining difficulty has reached an all-time high. At a difficulty of 1332.178 TH, getting involved in Ethereum mining right now will require substantial hardware to run a profitable operation. It is the highest difficulty peak of Ethereum mining to ever be recorded. Keeping in mind how this difficulty was 0.121 TH on July 30th, 2015, we have come a very long way over the past two years. Running an ETH mining operation right now will require a few dozen graphics cards, motherboards, and power supplies (and, hopefully, cheap electricity).
Getting your hands on the necessary graphics cards may be a big problem. Both AMD and NVIDIA have noted a sharp increase in graphics cards purchased for the sole purpose of mining cryptocurrencies such as Ethereum. Various countries are still dealing with low to no graphics card stock right now. One also has to keep in mind the Ethereum price is still experiencing its fair share of volatility, and turning a profit is not all that easy right now. Most people may even fail to break even at this point.
This raises the question as to what is next for the Ethereum mining difficulty. With the difficulty bomb still looming overhead, this sharp spike in difficulty will create a very pressing problem for the currency’s developers. There is a plan to delay the difficulty bomb by another 18 months, although it remains to be seen if that change will actually be implemented. Anyone looking to buy graphics cards to mine Ethereum right now may want to think twice before making a large investment.
