The title of this article is one of the questions most frequently asked at EMCD mining pool. This article explains why Ethereum mining earnings constantly fluctuate and why the results of the profitability calculator turn out to be wrong.
The factors that influence earnings from Ethereum mining:
Complexity of the ETH network. This means that high competition with other miners is a negative factor.
The workload of the Ethereum blockchain: the more often ETH users use the network in order to conduct a transaction or transfer, the better.
We are talking of a stable (not buggy) farm operation; if you encounter failures every few hours, those need to be fixed (contact EMCD Chats for help) before you proceed to mining.
Hash rate and complexity of the Ethereum network
The more miners use the network at a time, the higher its complexity and the more complex the task the network offers, the solution of which is needed to find a block. It works the other way around as well. Simply put, if there are a lot of miners on the network, and blocks are found more often, the network increases the complexity of tasks. Few miners - the complexity goes down. The more miners are using the network, the less ETH you will mine daily. The good news is that the hash rate of the Ethereum network has already grown so much that the arrival of a new group of miners does not affect the hash rate that much.
Ethereum network users use the ETH network in the following cases:
Transfers. ETH transfers from one person to another.
Fulfillment of smart contracts: CryptoKitties/ICOs and other NFT tokens, decentralized finance like trading exchanges, etc.
Swaps: The process of transferring tokens from one blockchain network to another ("token migration" or "token swap")
The size of a reward for a found block which is due to a miner is approximately 2 ETH. This is the basic value that encourages people to mine, and even if network users are not currently doing any money transactions, miners will still be rewarded.
Each user of the network wants his transfer or interactions with smart contracts to be as quick as possible. The more often users use the network, the higher the commission for the transfer or fulfilling of a smart contract. Miners, on the other hand, include in the blocks transactions that yield highest commissions, in order to get higher earnings. The term miners we use here denotes, first of all, mining pools (a special mining service that combines the power of all computers into one). It is not possible to mine Ethereum alone, as it requires huge amounts of power (hash power).
The mining pool receives 2 ETH for each found block, as well as the commissions included in such block. On busy network days, overall pool transaction fee rewards can run up to 1 ETH, which, together with the main reward of finding blocks of 2 ETH, makes 3 ETH.
Why does the mining calculator produce false results?
The point is that calculators simply analyze historical data and a value they show is based on it. In our case, the calculator determines the profitability based on the previous-day network; therefore, there are times when the client sees a certain value that is different upon payment. The reason for this explained above, i.e., on a certain day the ETH network was highly loaded, and the network commission fees had increased, and thus, you are shown the approximate earnings for that day (previous day).
The calculator is just a tool to help you estimate the approximate mining earnings. The calculator cannot predict the network workload at any given moment - it is impossible to predict in any way, therefore, we use the previous-day data.
Mining profitability - in dollars or ETH
One of the most common questions is ‘what caused the drop in the mining earnings?’ The answer lies in the Ethereum exchange rate. Miners often estimate their earnings in local currency (dollars or rubles), depending on where they live. If your earnings in local currency have suddenly dropped, first of all check whether the cause lies in the exchange rate, rather than in your equipment or in the mining pool.
Why have the Ethereum mining earnings increased?
To find the answer to this question, please re-read this article. It will be easy for you to find out exactly which factor made your earnings go up. Pay attention to the workload and complexity of the network. And don’t forget to check the current Ethereum exchange rates