Key takeaways
- Mining on the Ethereum mainnet is no longer possible, but it remains viable on Ethereum Classic, which still uses proof-of-work.
- Bitcoin mining consumes substantial power with ASIC hardware, while Ethereum’s staking model is far more energy-efficient.
- Bitcoin mining requires costly equipment, whereas Ethereum staking only needs 32 ETH or a staking pool, making it more accessible.
- Bitcoin mining has high earning potential but also high costs, while Ethereum staking offers steady returns with lower operational risks.
Can you still mine Ethereum in 2024?
Yes and no.
Traditional mining on the Ethereum mainnet is no longer possible. In September 2022, Ethereum underwent a significant upgrade known as “the Merge,” transitioning from the energy-intensive proof-of-work (PoW) consensus mechanism to proof-of-stake (PoS).
This change eliminated the need for miners to trial and error nonce combinations to validate transactions, instead relying on validators who stake their Ether (ETH) to secure the network. This transition reduced Ethereum’s energy consumption by approximately 99.95%.
However, for those interested in PoW mining within the Ethereum ecosystem, Ethereum Classic (ETC) remains an option. Ethereum Classic emerged from a fork in 2016 and continues to operate under the original PoW consensus mechanism.
The Ethereum Classic community upholds the principles of immutability and decentralization, maintaining the original Ethereum blockchain’s philosophy. Miners can still participate in securing the Ethereum Classic network and earn rewards through traditional mining methods.
Ethereum vs. Bitcoin mining before the Merge
For the sake of a history lesson, in preparation for the differences post-merge, let’s take a look at how Ethereum compared with Bitcoin in the days pre-Merge.
Naturally, they were both based on PoW, but they functioned differently. Bitcoin uses SHA-256, a cryptographic algorithm that demands massive computational power. To stay competitive, Bitcoin miners need specialized hardware called application-specific integrated circuits (ASIC) that can run nonstop, consuming large amounts of electricity to perform high-frequency trial and error. This is why Bitcoin mining often happens in areas where electricity is cheap, allowing miners to balance power costs with potential profits.
Ethereum’s former mining algorithm, Ethash, took a different approach. Ethash was specifically designed to resist ASIC mining, encouraging users to mine with standard graphics processing units (GPUs) rather than specialized hardware.
This design kept mining more accessible, reducing the risk of centralization by avoiding ASIC-dominated mining pools; however, it still required significant power, especially as competition grew.
Let’s take a look at how the Ethereum mining process changed post-Merge.
Did you know? The Merge upgrade, which transitioned Ethereum from proof-of-work to proof-of-stake, was in development for nearly seven years. Originally proposed in 2015, it took extensive research, testing and engineering to complete, culminating in September 2022.
Bitcoin vs. Ethereum: Comparing current mining algorithms
Ethereum’s PoS and Bitcoin’s PoW go about securing their networks in completely different ways. Here’s how each method works and why Ethereum’s shift to PoS is a big change.
Energy use and environmental impact
Bitcoin’s PoW requires miners to consume a ton of electricity, forcing mining rigs powered by ASICs to run nonstop; in fact, Bitcoin’s energy use is often compared to that of small countries.
Ethereum’s PoS is a game-changer here. PoS doesn’t need all that computing power. Instead, validators “stake” their Ether as collateral, letting the network choose them to validate transactions. This switch cut Ethereum’s energy consumption by over 99.95%, making it one of the most energy-efficient major blockchains.
Did you know? Bitcoin mining’s annual energy consumption in 2024 was estimated at 176.02 terawatt-hours (TWh), surpassing the yearly energy usage of countries such as Egypt, Malaysia and Poland.
Hardware and accessibility
To mine Bitcoin (BTC), you need specialized, high-powered ASICs. These machines are costly, power-hungry and not something most people have lying around. Because of this, Bitcoin mining is mostly in the hands of big players in areas with cheap electricity.
Ethereum’s PoS opens the door wider. To join, you don’t need fancy hardware — just ETH. Validators put up 32 ETH, or if that’s too steep, they can join a staking pool with smaller amounts. No high costs, no ASICs, just staked Ether.
Reward structures
In Bitcoin’s PoW, miners earn BTC for solving blocks, but rewards halve about every four years, which cuts earnings over time. This model relies on keeping mining competitive, favoring those who can afford larger, more efficient setups.
In Ethereum’s PoS, validators earn rewards based on their staked Ether. The more they stake, the more they can potentially earn, and unlike Bitcoin, rewards don’t depend on processing power. Smaller ETH holders can still earn rewards by joining pools, so anyone can participate.
Security mechanisms
Bitcoin’s security comes from miners. The more power they use, the harder it is to attack. That’s why Bitcoin’s mining network has grown so large; it’s extremely hard to outpower it.
Ethereum’s PoS relies on financial commitment. Validators who try anything dishonest risk losing their staked Ether — this is known as “slashing.” This built-in risk makes validators work honestly, and it’s far less power-intensive than Bitcoin’s approach.
Decentralization and network participation
Bitcoin mining is concentrated in areas with cheap electricity, which raises concerns about centralization in mining.
Ethereum’s PoS, by contrast, is accessible from anywhere with an internet connection and some ETH to stake, promoting a more decentralized network structure.
In short, Bitcoin’s PoW depends on heavy-duty computing and energy, while Ethereum’s PoS lets participants secure the network by staking Ether.
Bitcoin mining vs. Ethereum staking: Which is more profitable?
While Bitcoin mining can offer higher potential daily earnings during favorable market conditions, Ethereum staking provides a more accessible and stable income with a significantly lower environmental impact. For many, Ethereum’s PoS is a more feasible long-term option, especially without the need for costly hardware and electricity.
Let’s break it down. Please note that the figures referenced in the section below are as of Nov. 13, 2024.
Investment costs
- Bitcoin mining: To set up, a miner typically needs a powerful ASIC like the Antminer S19 Pro, costing around $5,000. Additionally, electricity costs are high — each device can consume 3,250 watts. At an electricity rate of $0.10 per kWh, daily costs run around $7.80 per miner.
- Ethereum staking: Validators don’t need specialized hardware. Instead, they must stake 32 ETH (worth about $60,000 if ETH is valued at $1,875). For those with less, joining a staking pool is an option, which reduces the entry barrier but splits rewards.
Profitability per day
- Bitcoin mining example: With a BTC price of $90,000, an ASIC miner like the S19 Pro can mine approximately 0.0003 BTC daily (worth about $27). Subtracting electricity costs, that’s a daily profit of roughly $19.20. However, profitability depends heavily on BTC’s price, network difficulty and electricity costs, and it can take months or even years to break even.
- Ethereum staking example: Staking 32 ETH can yield an annual return of 4%–5%, depending on network activity and the total staked amount. At a 5% annual return, staking 32 ETH ($60,000) could yield about $3,000 per year or roughly $8.20 per day. Staking rewards are stabler since they don’t depend on electricity costs or hardware maintenance.
Risk and volatility
- Bitcoin mining: Profit depends on Bitcoin’s price and network difficulty, both of which can fluctuate. Lower prices or higher difficulty make mining less profitable. Equipment also becomes outdated quickly, which means ongoing reinvestment in new hardware.
- Ethereum staking: Staking rewards aren’t impacted by electricity or hardware. The main risk is ETH’s price volatility. Stakers must lock up their ETH for a period, which could be risky if ETH’s price drops or if there’s a need to access those funds quickly. Some validators also face penalties or slashing for poor performance.
Environmental impact and accessibility
- Bitcoin mining: Power-intensive and largely dominated by big players with access to cheap electricity, Bitcoin mining is less accessible to everyday users. However, Bitcoin miners increasingly rely on renewable energy sources such as solar, wind and hydroelectric power to reduce their carbon footprint.
- Ethereum staking: With staking pools, more people can participate without owning 32 ETH, making staking more inclusive. It’s also vastly more energy-efficient, appealing to those concerned about sustainability. However, it’s important to note that stake concentration is increasing, with a small number of entities (such as Lido and Coinbase) holding large portions of the staked ETH, which could raise concerns about centralization and governance control in the network.
Did you know? While Bitcoin currently operates on a PoW system, there’s been ongoing debate about whether it could transition to PoS to reduce its environmental impact. However, due to Bitcoin’s decentralized governance and strong mining community, such a shift would be complex and controversial, making it unlikely in the near future.
Will Bitcoin’s model stand the test of time?
Bitcoin’s PoW mining, though energy-intensive, has proven to be incredibly secure, and the Bitcoin blockchain has never been hacked to date. As the leading cryptocurrency, it remains highly resilient, offering a robust and decentralized network.
While blockchains, such as Ethereum, with its transition to PoS, are adopting more energy-efficient models, Bitcoin continues to showcase its value as the first and most widely recognized blockchain.
Despite its higher energy consumption, Bitcoin’s PoW model is critical to its security and trustworthiness, providing strong protection against potential attacks. Moreover, many Bitcoin miners are increasingly moving toward renewable energy sources to power their operations. For example, large-scale mining companies like Bitfarms have committed to using renewable energy for mining, helping to reduce the environmental impact.
As the world continues to seek greener and more sustainable solutions, Bitcoin’s PoW model presents unique challenges but also substantial long-term advantages, including its proven track record of stability and security.