EIP-2878: Block Reward Reduction to 0.5 ETH

[AlexSSD7]

@lookfirst

Unlike bitcoin where latest solution is the only route to profitability, (smart) GPU miners don’t use latest GPU’s. The ROI is higher.

Indeed. Old AMD Polaris cards from the mid-2010s are still the most profitable.

[lmaonade80]

@JLilic

The hash rate dropped by about 50% when we were at the lows, but the price dropped by 93%. Therefore, there were still many miners who had lower costs than you and were able to turn a profit or break even. Your individual situation does not change the fact that the mining hashrate was still robust. Secondly, GPUs are faster and more efficient now, so there is some minor bias as to what the actual amount of work done is (which is more imporant than hash rate

First, my individual situation is better than most miners, especially in EU and NA. I know this because I now host for a lot of those miners that couldn’t operate profitably anymore. There was mass capitulation in '18/'19. I built my situation to be super low cost so that I hope I am the last miner to go under. But I agree, my situation shouldn’t be the takeaway here. Second, you are ignoring ASIC growth on the network, which can explain the hashrate. Third, like I said before and can also explain the hashrate, we (and I believe the industry at large) made ends meet because we believed in the project long term to deliver us mining rewards on par with the risk we took on. If revenue moves back down to those numbers because of change in the protocol, there is no reason to maintain our business as the light at the end of the tunnel was explicitly removed. Fourthly, while new hardware is better, it has not historically been worth the premium.

A 3080 is rumored to hash up to 93 Mh/s at ~250 watts and costs $650+ (if you can find it).

A 5700 can mine 51 Mh/s at ~125 watts and costs $400.

By contrast, a 580 can hash 32 Mh/s at 90 watts and up until recently, could be found for $120.

580 = 0.36 mhash/watt @ $3.75/mhash
3080 = 0.372 mhash/watt (at best) @ $6.5/mhash
5700 = 0.408 mhash/watt @ $7.69/mhash

Almost every large scale miner (at least that I know) opted for the half as cheap hardware that that is only 12% less efficient as the ROI is faster, even when the hardware was older tech. I think ASIC’s plays a larger role here than improved GPU tech.

@JLilic

Your fiat earnings are not being cut. Miners were mining 2ETH@$75 = $150 in December 2018. Miners will be earning 0.5ETH@$350 = $175 if this change happened now. And they will be earning 0.5ETH@$490 = $245 if it returns to its August highs.

Price is falling to $325 or so now. I think we both agree that the minimum security means ensuring honest mining co’s stay in business, even if it means they’re paid a lil bit more than they should during good times v. this proposal which makes this a somewhat profitable business when its good, and not worth it when its bad.

[lookfirst]

I am not convinced it is just asics. People with GPUs are switching workloads, because it is more profitable right now. People who turned off through the winter, are turning back on now. It is clear in the daily HR up/downs right now that there is a small window of profitability for people to survive right now. Literally, hundreds of thousands of GPUs are coming on/offline in a matter of days. Nobody would invest in ASICs just to turn them off, the ROI is too far out. Buying ASICs is the same as buying the latest GPU.

The irony of supporting ProgPoW, but at the same time, wanting to chop miners off at the knees, is not lost on me. This EIP not only will face pushback from ASICs, but all miners. Alas, ProgPoW has more of a chance of succeeding. It is humorous to see John appear when prices suddenly go up, but not appear when prices were low. Funny how that seems to happen on a cycle.

[lmaonade80]

@lookfirst

I am not convinced it is just asics. People with GPUs are switching workloads, because it is more profitable right now. People who turned off through the winter, are turning back on now. It is clear in the daily HR up/downs right now that there is a small window of profitability for people to survive right now. Literally, hundreds of thousands of GPUs are coming on/offline in a matter of days. Nobody would invest in ASICs just to turn them off, the ROI is too far out. Buying ASICs is the same as buying the latest GPU.

You are right, I didnt mean to suggest ALL of the growth is ASIC’s. You need to just look at GPU prices to know that GPU’s are coming back online. But those GPU’s have likely switched hands and a lot of people went under in the process. What is unknown is what % is ASIC’s and we may never know without implementing a fix.

[jumpnkick]

great business braking even…

[CryptoBlockchainTech]

This has been my business model all along. We only cover our expenses and HODL mined Ethereum because we believe in the dev team. There are quite a few of us with this business model. On the other hand ASICs are forced to sell everything they mine before the overproduction of them and faster versions make them obsolete.

Unlike GPU miners, ASIC miners don’t HODL and cause immense selling pressure on Ethereum as they sell it for Bitcoin. This is primarily the reason why Ethereum has been unable to advance against Bitcoin the last two years even with major milestones being achieved.

Put simply ASICs break our GPU business models of supporting Ethereum and HODLing as many coins as we can to support the network again through POS. ASICs sell everything they have so they can buy the next greatest ASIC. For them it is all about dominance and pushing everyone else out leaving them more share of coins mined.