The competitive nature of cryptocurrency is always evident in the market as various digital assets try to outpace one another towards worldwide adoption. Ethereum, which was created by Vitalik Buterin, has recently been on a bullish run which has seen it take the second place in the top-ten cryptocurrencies, overtaking Ripple’s XRP.
At press time, the market capitalization of Ethereum was at $12.9 billion whereas the price valuation of one token was at $123.38. However, it has been recorded that the mining rewards awarded to miners for token mining in Ethereum have reached its lowest levels ever.
According to data from the Etherscan.io, it can be observed that the Average Difficulty [TH] of mining on 9th Feb 2019 was recorded to be around 2370.09 and then the difficulty suddenly spiked up to 2845.49 on 12th Feb 2019.
The graph below represents the active rate of difficulty data in the mining network,
On 10 Feb, 13,370 ETH was minted which is substantially lower than the number that was minted on any day in December 2018, when the mining clocked around 20,000 ETH. The data clearly reveals that the severe increase in difficulty has prompted the low creation of Ethereum tokens and caused a constricted reward for the miners.
In August 2018, a core of the primary developers concluded a meeting with the consensus to increase the mining difficulty for the coin and it was termed as a “difficulty bomb”. The main goal behind increased difficulty is to improve Proof of Work mining in obtaining a consistent reward and also to reduce the daily amount of ETH added in the network. However, the difficulty protocol was delayed owing to the launch on the long-anticipated Constantinople hard fork.
Many ETH miners and crypto investors have predicted an increase in difficulty of the mining process but the decrease in coin creation has come as a huge surprise for much of the Ethereum mining community.
In the current bear market, while most of the coin prices have suffered hard falls, ETH has had the most difficult one as a result of the waning ICO market and reduced demand for Ethereum’s ERC-20 tokens. The development team of the cryptocurrency has initiated a recovery and responded to the community and assured that they are looking to improve the coin’s operation in the market as a way to keep Ethereum as an authoritative contender in the virtual asset ecosystem.