Key Takeaways
- Ethereum has transitioned from Proof of Work (PoW) to Proof of Stake (PoS), eliminating traditional mining.
- Validators have replaced miners and contribute to network security by staking their ETH.
- Even though mining is dead, users can still earn ETH through staking, yield farming, or providing liquidity.
- Cryptocurrencies utilizing the Proof of Work consensus mechanism, like Bitcoin, Monero, and Litecoin, can still be mined.
Cryptocurrency mining has long attracted individuals and businesses because of its potential to generate rewards in digital currencies. But mining is not just about the variable profits, it plays a vital role in the blockchain ecosystem. Through mining, new cryptocurrencies enter circulation, and blockchain networks maintain their security. Miners validate transactions by solving complex mathematical puzzles and creating new blocks on the blockchain.
For their assistance in validating transactions and securing the network, they receive rewards in the form of cryptocurrency. This reward mechanism ensures that many blockchain networks, particularly those using the Proof of Work (PoW) consensus mechanism like Bitcoin, continue to function smoothly.
But not all networks use the Proof of Work consensus mechanism. Ethereum has made the switch from its mining-based PoW system to a more energy-efficient and future-proof Proof of Stake (PoS). The logical question arises, can you still mine Ethereum’s native ETH in 2024?
The answer is no, mining Ethereum is a thing of the past but that doesn’t mean you can’t get ETH. As always, there are still ways to partake in the Ethereum network and earn ETH through alternatives to mining. In this article, we’ll go over Ethereum and how you can earn ETH in 2024.
Ethereum and Mining Explained
Ethereum, launched in 2015 by Vitalik Buterin and other developers, quickly became one of the most prominent and innovative blockchain networks in the world. It was the first one to introduce the concept of smart contracts, self-executing bundles of code that function without intermediaries. Through smart contracts, Ethereum started a revolution and empowered decentralized applications (dApps) on its platform.
Ether, the native cryptocurrency of Ethereum, facilitates transactions within this ecosystem, serving as the currency for transaction fees, smart contracts, and decentralized finance (DeFi) platforms.
Since its inception in 2015, Ethereum operated on a Proof of Work consensus mechanism, similar to Bitcoin. In the PoW system, miners compete to solve cryptographic puzzles, and the first to solve the puzzle wins the right to add a new block to the blockchain. This process rewarded miners with newly minted ETH. To achieve this, miners use the best specialized hardware such as computer GPUs and ASICs (application-specific integrated circuits) that can handle the complex calculations necessary to mine blocks.
Ethereum mining under PoW helped secure the network by preventing fraudulent transactions. It ensured that only legitimate transactions were recorded on the blockchain. However, as the network expanded and its popularity surged, so did its transaction load. This led to concerns about scalability, transaction fees, energy consumption, and the network’s overall efficiency.
To address these issues, Ethereum’s developers initiated a transition from PoW to Proof of Stake, culminating in an event known as “The Merge” upgrade.
Why Is Ethereum Mining No Longer Possible? The Merge Explained
On 15 September 2022, Ethereum underwent a massive upgrade known as “The Merge”. During this upgrade, the Ethereum network transitioned from Proof of Work to Proof of Stake. This shift fundamentally changed the way Ethereum operates and eliminated traditional mining from the network.
Under the new PoS system, validators replaced the previously existing miners. Validators are now responsible for adding new blocks to the blockchain, approving transactions, and maintaining the security of the Ethereum network. So how exactly does the new PoS system work?
Instead of using computational power to compete for the next block, validators must stake (lock up) a certain amount of ETH to participate in block validation. The more ETH a validator stakes, the higher their chances of being selected to propose the next block. Once selected, validators earn ETH as a reward for contributing to the network’s security.
The transition to PoS had significant implications for Ethereum’s energy consumption. Unlike PoW, which requires enormous computational power and electricity, PoS is far more efficient. According to the Ethereum Foundation, the PoS consensus mechanism consumes 99% less energy than PoW, turning Ethereum into an eco-friendly blockchain network.
This transition to PoS also means that Ethereum mining is no longer possible. Since Ethereum’s transition to the proof of stake algorithm, there is no hardware or software, not even a cloud mining service that can help you mine ETH. If you see anyone offering it, it’s most likely a scam.
With that said, this doesn’t mean that you can no longer earn ETH. Users can still contribute to the security of the network and earn rewards by staking ETH and participating in other DeFi activities.
How To Earn ETH Without Mining
Although Ethereum can no longer be mined, you can still earn ETH by actively participating in the network. Let’s have a look at some of the most popular alternatives to mining:
- Becoming a Validator
- Staking
- Liquidity Provision
- Yield Farming
Protocol Staking: Become an Ethereum Validator
One of the most direct ways to earn ETH is by becoming a validator. Validators play an essential role in maintaining Ethereum’s security by confirming transactions and creating new blocks.
To become a validator, you must stake a minimum of 32 ETH as collateral. The more ETH you stake, the higher your chances of being chosen to validate transactions and add blocks to the blockchain. Once you validate a block, the network rewards you with additional ETH.
Becoming a validator could be challenging for most users as 32 ETH at the current price of the assets is roughly $74,000. And that’s not all, in addition to the amount of ETH it also requires some technical expertise to successfully run the validator software.
The upside is that it provides consistent rewards over time, making it a lucrative option for those who can meet the staking requirements. Fear not though as there are other more accessible options out there.
Staking ETH: Explaining the Process of Staking ETH To Earn Rewards
If you don’t have the 32 ETH required to become a validator, you can still earn rewards by staking smaller amounts of ETH through liquid staking or pooled staking platforms. Let’s break down these two popular methods of staking:
- Liquid Staking: Platforms like Lido offer liquid staking, allowing users to stake their ETH while maintaining access to their staked assets. In return, the platform issues liquid staking tokens, which represent your staked ETH and can be traded or used in DeFi applications. Liquid staking is ideal for those who want to earn staking rewards while keeping their assets accessible for trading or other activities.
- Pooled Staking: Alternatively, if you don’t have the 32 ETH required to become a validator, you can join a staking pool. Staking pools aggregate smaller amounts of ETH from multiple participants to meet the threshold needed to run a validator node. These pools distribute rewards proportionally to participants based on their contributions, similar to a PoW mining pool. While pooled staking doesn’t offer the same flexibility as liquid staking, it lowers the entry barrier for smaller investors.
Both methods enable users to earn ETH without needing specialized hardware or large amounts of capital.
Staking vs. Mining
While both staking and mining contribute to the security of a blockchain network and offer rewards in return, they differ significantly in terms of energy consumption, hardware requirements, and accessibility. Let’s compare some of their notable differences:
| Mining | Staking | |
|---|---|---|
| Consensus Mechanism | Proof of Work (PoW) | Proof of Stake (PoS) |
| Energy Consumption | High (demands significant computational resources) | Low (requires very little energy) |
| Hardware Requirement | Requires specialized equipment (eg ASICS, GPUs) | Standard hardware or participation in staking pools |
| Equipment Depreciation | Hardware loses value over time | No depreciation, but there is opportunity cost of staking |
| Investment Cost | Large upfront investment for hardware and electricity | Varies based on cryptocurrency and the amount staked |
| Entry Barrier | High (requires technical know-how and large capital) | Low (more accessible with smaller investments) |
| Rewards | Block rewards plus transaction fees | Rewards from staking and transaction fees |
| Reward Frequency | Inconsistent (rewards depend on block discovery and difficulty) | Consistent (rewards are based on staking duration) |
| Security | High security ensured through computational effort | High security achieved through financial stake |
| Environmental Impact | Significant (due to high energy consumption) | Minimal environmental impact |
| Centralization Risk | Risk of centralization in large mining operations | Risk of centralization with large holders of staked funds |
| Double-Spend Protection | High, as it’s difficult to control the majority of computing power | High, due to the difficulty of acquiring a majority stake |
| Examples of Cryptocurrencies | Bitcoin, Litecoin, Ethereum (before the PoS shift) | Ethereum (after PoS transition), Cardano, Polkadot |
| Inflation Control | New coins are produced through mining | New coins are created through staking |
| Community Involvement | Typically low (technical expertise often needed) | Usually higher (easier to engage in governance) |
- Energy and Environmental Impact: The mining process on PoW networks, such as Bitcoin, requires significant computational power and energy consumption. Staking, on the other hand, is far more energy-efficient because it doesn’t rely on solving complex mathematical problems. Validators secure the network by staking their assets rather than using computational power.
- Hardware Requirements: Mining requires expensive and specialized equipment like ASICs (for Bitcoin) or GPUs (for Ethereum before the transition). Staking can be done with regular hardware, or you can participate in staking pools without purchasing any specialized equipment.
- Reward Mechanism: Mining rewards fluctuate based on several factors, such as mining difficulty, competition, and the amount of computational power available. Staking typically offers more predictable rewards, as validators receive rewards based on their staked assets and the network’s performance.
- Investment and Entry Barrier: Mining has a higher barrier to entry due to the need for costly hardware and the technical expertise required to set up a mining rig. In contrast, staking offers lower barriers to entry, especially through pooled staking and liquid staking platforms.
Earn Rewards by Providing Liquidity to ETH Trading Pairs
Another way to earn ETH without mining is by providing liquidity to ETH trading pairs on decentralized exchanges (DEXs) like Uniswap, SushiSwap, and Balancer. Providing liquidity involves depositing ETH and another token (usually a stablecoin such as USDT, USDC or DAI) into a liquidity pool. This pool enables other users to trade between the two tokens, and in return for providing liquidity, you earn a share of the fees generated from trades within the pool.
Liquidity providers play an important role in the proper operation of decentralized exchanges by ensuring that there is enough liquidity available for traders. Despite that, liquidity provision comes with some risks, particularly impermanent loss, which occurs when the value of the tokens in the pool fluctuates.
Earn ETH Via Yield Farming
Yield farming is another method of earning ETH without mining. It involves lending ETH and other cryptocurrencies to DeFi protocols in exchange for rewards. By depositing ETH into a specific protocol, ETH holders can earn interest on their holdings, often in the form of additional ETH or other tokens.
Yield farming typically offers higher returns than staking but comes with higher risks due to market volatility and potential losses. It’s essential to research the protocol you’re using and understand the risks before committing your ETH to yield farming. Some of the biggest risks in yield farming include smart contract vulnerabilities and hacks that lead to the loss of funds in the protocol.
Check out our article explaining What is Yield Farming?
What Coins Can You Mine?
While Ethereum is no longer mineable, there are plenty of cryptocurrencies that use the Proof of Work consensus mechanism and can be mined. Some of the most popular options available on the market include:
Bitcoin
Bitcoin (BTC), the first cryptocurrency ever created, remains the most well-known and widely mined cryptocurrency. To this day, it continues to use the PoW consensus mechanism and mining Bitcoin has become much more difficult in comparison to the early days. Regular users can’t mine Bitcoin with their PC GPUs since ASICs have dominated the market, becoming the only viable option. As a result, Bitcoin mining has become a business of its own with huge corporations owning the biggest mining farms.
Monero
Monero (XMR) is a privacy-focused cryptocurrency that aims to provide secure, anonymous transactions. Unlike Bitcoin, Monero is more accessible for individual miners, as it can still be mined using consumer-grade CPUs and GPUs. This is the direct result of Monero’s RandomX algorithm, which was designed to resist ASIC mining, ensuring that mining remains decentralized and accessible to everyone. If you are interested in mining XMR, here is our detailed guide on how to mine Monero.
Litecoin
Litecoin (LTC) is a hard fork of Bitcoin that came to life in 2011 and it’s another cryptocurrency that can be mined. Just like its predecessor Bitcoin, Litecoin uses PoW, but it employs the Scrypt algorithm, which allows for faster block generation times and reduces the need for expensive hardware. Miners can use both ASICs and GPUs to mine Litecoin. If you are interested in mining LTC, here is our detailed guide on how to mine Litecoin.
Conclusion
While Ethereum mining is no longer possible after the network’s transition to Proof of Stake, users can still earn ETH through staking, liquidity provision, and yield farming. These alternatives provide opportunities for individual users to secure the Ethereum network and earn rewards while doing it. All without the need for specialized hardware. Anyone interested in traditional crypto mining will find plenty of options with the Proof of Work coins that still exist today.
FAQs
How long does it take to mine 1 Ethereum?
Mining Ethereum is no longer possible due to the transition to Proof of Stake.
Is it still profitable to mine Ethereum?
No, Ethereum can no longer be mined since The Merge in 2022.
How many ETH can you mine a day?
You cannot mine Ethereum anymore, but you can earn ETH through staking or other DeFi activities.
Can I mine Ethereum on my phone?
No, Ethereum can no longer be mined, and mobile mining was never efficient due to the network’s difficulty.
Can I mine Ethereum on my PC?
Ethereum mining is no longer possible, but you can participate in staking and other activities to earn ETH.
