Ethereum: Understanding mathematics behind the mining profitability calculators
As Blockchain enthusiasts, we are always curious about internal cryptocurrency activities such as Ethereum. One of the aspects, which is crucial for anyone who is interested in calculations regarding the profitability of extraction, is to understand how they work. In this article, we will immerse ourselves in mathematical concepts of mining calculators, such as those you mentioned.
What are mining calculators?
Mining calculators provide a simple and available way of calculating the expected profit from Ethereum mining or other cryptocurrencies. They take into account various factors, such as block prize, transactions fees, difficulty level and more. The goal is to give miners an idea of whether they will achieve profit by investing their computing strength.
Basic calculations
To create your own mining calculator, you must understand the basic calculations. Here are some key concepts:
- Block prize : Each block in the Ethereum network contains 6 new ether (ETH) as a prize for miners who successfully solve a complex mathematical puzzle known as «proof of work» (POW). The block award is set at 50,000 ETH per block.
- For example, if the user sends 10 ETH to another user, he pays a fee of $ 1. In Ethereum, transaction fees are from 0.0005 to 4.50 ETH per transaction.
- Energy costs : Energy costs related to mining are the main reduction factor for profitability. When electricity prices change, the cost of the energy of your miner will increase or fall accordingly.
Extract calculator formula
To calculate the expected profit using a mining calculator, such as the one you mentioned, you can follow these steps:
1
- Calculate
transaction fees : multiply the average transaction fee for the last x blocks by the number of transactions carried out during this period (e.g. x = 1000).
3
- Calculate
The expected profit on the block: subtract the total transaction fees from the total block reward.
- Repeat steps 3-4 for many blocks to calculate the expected profit.
Example of a mathematical pattern
Take an example with a block prize of 50,000 et (n = 1), a transaction fee of USD 0.002 for a transaction (x = 10,000 transactions) and an estimated cost of energy 0.15 USD/kWh:
`Markdown
Expected profit on the block:
USD 50,000 (block prize) - USD 2 (transactions fees) = USD 49,998
Energy cost: Let's set 1 kWh ~ 0.12 $
Average energy consumption: 0.12 USD/kWH \* 10^6 kWh/year ction 120 kW-HR
Expected profit per hour: $ 49 9988 /8760 HR ½ 5.67 $ / hour
Example of Google spreadsheet
To create your own Google spreadsheet, you can use the following formula:
= ((50,000 x 6) - (2 x 10,000) ÷ 12000
This formula calculates the expected profit on the block by subtracting transaction fees from the total block reward and then dividing energy by the cost.
Tips and variants
- If you prefer, use a different calculation method. For example, you can calculate the expected profit based on the number of transactions or blocks extracted.
- Consider factors such as electricity costs in the region when calculating energy expenditure.
- You can add additional columns for the level of block difficulties (i.e. calculations based on difficulty), which include more complex mathematical concepts.