Cryptocurrency has come to stay here for a long time. Although there are over 1300 digital currencies that have evolved since it was first heard of, Bitcoin and Ethereum are the two-main cynosures around which cryptocurrencies revolve. You too, like many others, may be wondering which of the two is more lucrative to mine. Before you start evaluating, learn a little more about cryptocurrencies.
What are They:
Bitcoin and Ethereum are two of the biggest and most popular cryptocurrencies. Bitcoins offers coins(BTC) while Ethereum offer tokens (Ethers). Bitcoins is a cryptocurrency which looks to transform the existing money assets into a truly global currency. Ethereum is a token that applies the smart contract and writes an agreement on the digital platform instead of the paper document and can never be erased.
Both Bitcoins and Ethereum serve the basic purpose of transferring money to anywhere in the world using the blockchain technology without using the services of any centralized banking system. Users can mine the two digital currencies even from their home if they have the right hardware and software equipment. Nevertheless, there are several differences between the two.
Bitcoin was initiated in 2009 as an alternative money platform while Ethereum, started in 2015, enables the users and entities to build new applications based on contracts.
Before you take the plunge into mining, you should consider the investment you must make while creating a mining rig. In the initial days, when mining was still in nascent stage, it was possible to mine at home with the lower cost CPU that however burnt a lot of power. When the number of miners started growing, the competition increased and people were looking at ways to enhance the speed and make it more efficient. Companies started building specific GPUs that are found more energy saving as well as offered faster mining. Both Ethereum and Bitcoin use the Proof of Work algorithm. Ethereum blocks roughly take 12 seconds to mine while bitcoin takes 10 minutes.
Bitcoin mining difficulty has been changing steadily and is more predictable in nature. It has been changing every 4 months in recent times. The difficulty levels in 2015 doubled in roughly 11 months. In the first half of 2016, it took 6 months and in the second half about 8 months. Factors like people’s interests, cost of hardware, a rise of a few other digital currencies have been influencing the changes. Bitcoin has become more popular now with new miners and investors. The difficulty level is likely to increase again sometime soon.
Building an Ethereum mining rig is expensive today. Many analysts and cryptocurrency experts claim that investing on Ethereum rig today will not yield the results you would desire and sooner or later the system will perish. People have been losing money. Ethereum’s switch to the Proof of Stake(PoS) “Casper” has been postponed and the earliest it could happen is only in the latter half of 2018. The PoW difficulty level in Ethereum is a step planned to be done at the time of PoS introduction, by the insertion of a “difficulty bomb”. The most difficult mining period is called “Ice age”.
Proof of Work versus Proof of Stake:
PoW is a system where some complicated data is resolved and the people are rewarded with digital coins. The people who do the work are called miners and they are rewarded for their time and resources. As mentioned earlier, mining can be done using CPU or GPU. Bitcoin, Ethereum, and majority of other cryptocurrencies adopt the Proof of Work algorithm.
Proof of Stake requires the miners to stake i.e. hold on to their currencies and the longer they hold, the more the reward is. Peercoin is the first crypto to adopt the PoS. Ethereum is working on its own PoS and has named it Casper. It was due to be released in 2017 but has got deferred to the latter half of 2018. With Casper, Ethereum hopes to bring down the high expenditure involved in the mining infrastructure and slowly close the mining rig process.
Prediction for The Future:
Bitcoin has almost touched about $5,000. Ethereum which started at about $40 in January 2017 is closing in at nearly $300 which is a very impressive growth. To predict the exact nature of trends is difficult. Ethereum requires more investment in order to allow people to make good profits in comparison to Bitcoins. However, one thing that is confirmed is cryptocurrencies will be more than likely the future way of doing business and will not go away soon unless something more amazing and lucrative comes up soon.
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