Cryptocurrency miners solve complex equations to earn rewards in the form of Crypto. Ethereum miners solve complex equations and thus they earn rewards in the form of newly generated Ether. However a quick analysis of Ethereum’s blockchain through Etherscan and Etherscan released data reveals that Ether rewards are at their lowest level in Ethereum’s existence.
On average, around 20 000 Ether was created daily throughout December 2018. Mid February, Ethereum is creating around 13,350 Ether per day, down from the all-time high of 39 000 in July 2015. Etherscan revealed that the reason for the decrease in Ether creation is the recent increase in Ethereum’s mining difficulty.
Ethereum is moving forward with Constantinople
The difficulty bomb is also called the Ethereum ice age, because it’s the mechanism that increases the Proof of Work (PoW) mining difficulty and decreases the Ether rewards per block. The reason for this implementation is to prevent miners from continuing their mining the Ethereum blockchain after they switch to the long awaited Proof-of-Stake (PoS) algorithm.
The whole Ethereum community is waiting for Proof-of-Stake, but PoS algorithm has been delayed multiple times. This in turn delayed the difficulty bomb through forks and small updates. However, this isn’t the first time that the core developers have delayed things. Recently the Ethereum core developers decided to delay the difficulty bomb by including a code in the next Ethereum hard fork – Constantinople.
Developers have also decided to delay the hard fork Constantinople, becoming a whole sequence of events. Delaying the difficulty bomb means that miners are currently mining at the lower difficulty. To compensate this, Constantinople will do the “thirdening”, reducing the block reward from 3 to 2 Ether.
The update is scheduled for block 7,080,000 which will happen on February 27th. When it happens, the quantity of daily Ether will increase again, because the creation of new blocks will also become easier.
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