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ETH mining still highly profitable despite upcoming Eth2 upgrade

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Ethereum miners continue to enjoy lucrative payouts for their efforts in 2021, while the smart contract blockchain platform edges closer to a move away from its proof-of-work consensus. The past few months have been phenomenal for much of the cryptocurrency space, as the likes of Bitcoin (BTC), Ether (ETH) and various other coins have seen monumental gains in value. The increased volume of transactions and users have also directly benefited the cryptocurrency mining ecosystem.

Ethereum miners in particular have banked serious profits due to the success of decentralized finance projects running on their blockchain. These various DeFi platforms have driven transaction volumes and activity on the Ethereum blockchain, which has led to skyrocketing fees and increased processing times. While end-users have to bear the brunt of increased transaction fees, miners have been smiling all the way to the bank.

As a result, Ethereum miners saw record revenues of over $830 million in January 2021, levels not seen since the first few weeks of 2018 before Ether, Bitcoin and the wider cryptocurrency markets crashed after the spectacular highs of December 2017.

ETH mining outperforms Bitcoin

While Bitcoin sits firmly at the top of the list of cryptocurrencies by market capitalization, BTC miners are not enjoying the same level of profitability as Ethereum miners. Philip Salter, head of operations at Genesis Mining, told Cointelegraph that while mining Ethereum is “super profitable” at the moment, current miners and potential newcomers must still be aware of the initial barriers to entry.

“The margins you can make with ETH are much higher than the margins you make with BTC. However, that doesn’t mean that it’s more profitable overall. The reason is that ETH mining hardware is more expensive than BTC mining hardware, so you have a higher initial cost that you need to break even on.”

Salter noted that Litecoin (LTC) and Dash mining is also lucrative but is still not on the same playing field as BTC and ETH. He also added that all other cryptocurrencies that are mined using graphics cards were not as profitable as mining ETH.

The pseudonymous founder of Pylon.finance, OxGrimReaper, also weighed in on the current mining climate and the current superior profitability of Ethereum mining, telling Cointelegraph:

“ETH is the most lucrative mining opportunity at the moment, even more so because of a GPU and hardware lockout in retail. Plus we’re in the middle of Chinese new year, meaning no production happening in factories. The entry barrier at this moment is as high as it’s ever been.”

The Pylon.finance founder also said that while Bitcoin mining was less lucrative than GPU mining, it’s easier to gain entry, given that users can buy ASIC mining machines, which are essentially plug-and-play. However, GPU mining has various barriers to entry, including the cost of GPUs, the technical knowledge required to set up a system, as well as operational considerations.

OxGrimReaper also agreed that the success of DeFi platforms has had a major part to play in the profitability that Ethereum miners are currently enjoying. Ethereum gas fees, which are the fees paid to miners for processing a transaction, have sky-rocketed in tandem with the increased use of DeFi platforms, and he says this is a positive sign for miners:

“Front-running bots on AMMs is a major catalyst for the war on gas. But of course, a war on gas means high costs of doing business. High gas is a great indicator that a miner is making money. Gas touched an all-time high this year, while mining also hit an all-time high. Additionally, transactions on the ETH ecosystem hit an all-time high this year. These are all strong indicators for a healthy mining ecosystem, especially for those who already have their infrastructure in place.”

ETH miners have some time to prepare for Eth2

For the time being, Ether miners are continuing to cash in on the high fees and transaction volume as they maintain the blockchain. This is despite the ongoing, slow-moving transition to Ethereum 2.0, which will signal the start of an end of Ethereum mining once the mainnet merges with the proof-of-stake Beacon chain, which was launched in December 2020.

The move away from the current PoW protocol, which Ethereum currently runs on, is aimed at making the blockchain more scalable, secure and sustainable. However, it will also bring an end to what has been a profitable enterprise for Ethereum miners. While the full transition to Eth2 is still very much a blip on the horizon, Salter says that miners will carefully weigh-up improvements to their operations as Eth2’s development continues:

“Ethereum switching to PoS has been a possibility for a very long time, but it always seems to be about two years down the road. Miners will assess the risk of this happening before they do any investments into new hardware.”

Salter added that a more pressing concern is the upcoming Ethereum Improvement Plan EIP-1559, which proposes to burn a big portion of the transaction fees instead of giving it to the miners, has substantial implications for the profitability of ETH mining: “If accepted, this will lead to a significant reduction in mining rewards — up to 50% less. Such drastic changes affect the Ethereum ecosystem quite frequently, creating uncertainty for investors.”

Ethereum’s transaction fees have continued to skyrocket in February 2021, with data from Blockchair estimating that the average transaction fee for Ether was up to $50, compared to Bitcoin’s average of $30 per transaction.

Meanwhile, OxGrimReaper said that their operation could quite easily swap over to mine other cryptocurrencies profitably that make use of GPUs instead of ASICs, which are used to mine cryptocurrencies, such as Bitcoin:

“There are 10+ coins that our GPUs can mine profitably with no issues. We are doing so now with the 4G cards deprecated on Ethereum. It is mining Ravencoin with some profitability. For us, the protocol isn’t as important as the arbitrage between electricity and computing hash rates.”

Nevertheless, cryptocurrency commentators, such as Lark Davis, also known as “The Crypto Lark,” have stressed the need for Ethereum’s developers to expedite the transition to Eth2 and give users some respite from the astronomically high Ethereum transaction fees.

While many users have taken to using DeFi platforms, such as Uniswap and 1inch, to perform simple swaps between trading pairs, the fees for these services and transactions are becoming exorbitantly high for the average user, making it hard to onboard new people into the DeFi sector.

Source: https://cointelegraph.com/news/eth-mining-still-highly-profitable-despite-upcoming-eth2-upgrade

Blockchain

Mike Novogratz’s Galaxy Digital Filed for Bitcoin ETF With the SEC

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The number of companies filing to receive approval to launch a Bitcoin ETF in the US continues to increase with the addition of Mike Novogratz’s Galaxy Digital. If approved, the Galaxy Bitcoin ETF will trade on the NYSE Arca exchange. 

  • Based in New York, Galaxy Digital is a diversified financial services firm dedicated to the cryptocurrency and blockchain industry. The company has made another pro-crypto step by filing with the US Securities and Exchange Commission to launch its own Bitcoin exchange-traded fund. 
  • The document reads that if the Commission approves the application, the Galaxy Bitcoin ETF will issue common shares of beneficial interest that trade on NYSE Arca.  
  • The value of the shares will follow the performance of the Bloomberg Galaxy Bitcoin index, which includes multiple pricing sources. 
  • “In seeking to achieve its investment objective, the Trust will hold bitcoin and will value its Shares daily based on the value of the Index, which is calculated based on data from bitcoin pricing sources selected by Bloomberg Index Services Limited.” 

  • With Galaxy Digital’s application, the number of US-based companies striving to launch a Bitcoin ETF continues growing. However, the SEC has yet to approve the first such product. VanEck’s filing seems to be a step ahead as the Commission put its Bitcoin ETF proposal for discussion in March. 
  • At the same time, Canada has led the way with several operational BTC ETFs. In fact, Galaxy Digital already has a functioning one in North America. Novogratz’s firm partnered with CI Global Asset Management, and the CI Galaxy Bitcoin ETF launched on the Toronto Stock Exchange (TSX) on March 9th.  
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Source: https://cryptopotato.com/mike-novogratzs-galaxy-digital-filed-for-bitcoin-etf-with-the-sec/

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Blockchain

Where fiat holders lose out, Bitcoiners can gain from inflation

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Currency instability and hyperinflation seemed unreal until a global pandemic struck, sending many nations into economic turmoil. Most economists began to wonder if the end of the pandemic would mean the birth of another Venezuela, which faced a 438% (hyper) inflation rate. However, like several other Bitcoin enthusiasts like Max Keiser thinks that inflation and the price of Bitcoin are correlated.

The aforementioned data is the long-term compounding of past, present, & possibly future base money, since 1970.

In a recent interview Matthew Mežinskis spoke about the inflation rate of the global monetary base, weighted averaged by each base money’s equivalent in USD. What’s important to note here is, it matched the overall 12.8% CAGR (6-year doubling time) we already saw above.

Source: https://platoblockchain.net/wp-content/uploads/2021/04/where-fiat-holders-lose-out-bitcoiners-can-gain-from-inflation.jpg

For all of 2019, central banks were actually on track to deflate their currencies. This would have been a first in the modern fiat era. So interestingly, no matter what one argues for money printing, 2019  ended with positive inflation, weighted at 1.5%.

Furthermore, he touched upon the role of monetary metals like gold. Gold’s rate of growth had, in fact, been around 1.8% per annum for the last 170 years.

Source: https://platoblockchain.net/wp-content/uploads/2021/04/where-fiat-holders-lose-out-bitcoiners-can-gain-from-inflation.png

Almost similar with silver – it’s almost as politicized as its “bigger brother of gold”. Lastly, he shed some light on Bitcoin. He added:

“Remember why the overall compound growth, thus far, is so high, and why it will never be that high again. And now is about the time for a clarification note on the Bitcoin system’s compound annual growth rate, specifically.”

Bitcoin’s finite supply, which may overcome inflation risks is what comforts many. However, this narrative keeps evolving as well.

Source: https://platoblockchain.net/wp-content/uploads/2021/04/where-fiat-holders-lose-out-bitcoiners-can-gain-from-inflation-1.jpg

What’s interesting to note here is, the phrase “supply issuance” for Bitcoin’s chart titles, and not “inflation.” Bitcoin’s “inflation,” economically, was already baked in. As already demonstrated, its growth rate is known until 2141, per the protocol. So when it comes to bitcoins, “inflation” is not the best term.

Even though the price of Bitcoin may indeed surge, its path to the target could be volatile. In the past, the asset’s price has appreciated and even collapsed several times. But some stated that even as Bitcoin increased in price, the rate of inflation, and forecasts for inflation, “remained stable.” Some provide a contrary opinion that economies need a bit more inflation, not less. At the same time, they do not expect hyperinflation to occur again, after the last great recession.


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Source: https://ambcrypto.com/where-fiat-holders-lose-out-bitcoiners-can-gain-from-inflation

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Holdefi: A Unique Decentralized Lending Platform Shaping the Future of DeFi

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The DeFi industry offering an alternative to traditional financial services is evolving at a rapid pace. There are few platforms that are using the latest advances in the blockchain space to create DeFi solutions that could not only outperform their peers but also capable of adapting to new developments in the blockchain technology itself.

Holdefi is one such open-source, non-custodial decentralized lending platform that offers an attractive passive income stream to investors while enabling the masses to borrow at attractive interest rates. Like its counterparts, Holdefi allows users to instantly secure credit against crypto collateral. The platform does not require the borrowers to provide their KYC or prove their creditworthiness before borrowing. All they have to do is to deposit their crypto assets as collateral to secure a loan in any of the supported cryptocurrencies including stablecoins like USDC, DAI, USDT and BUSD. Users can deposit collateral in one or more types of crypto assets. Similarly, they can borrow different cryptocurrencies using single collateral as long as the value meets the platform requirements.

Attractive Interest Rates and Better ROI

Holdefi uses a mechanism that calculates interest rates for borrowing based on the market and competitive conditions. By doing so, it will balance the demand and liquidity to provide an attractive interest rate to borrowers. Meanwhile, lenders providing liquidity to the supply pool will receive a portion of the interest payments in proportion to the invested amount.

Lenders on Holdefi will get a bigger share of interest payouts in comparison to those on other DeFi platforms as borrowers do not receive any reward or interest on their collateral deposits. So, the lenders end up receiving a proportional share from the overall interest received by the platform from its borrowers.

What Makes Holdefi Stand Apart from the Rest?

Holdefi is an advanced DeFi solution based on the Ethereum protocol. Powered by a native ERC20 standard HLD token, the project is designed to work flawlessly on Ethereum’s existing PoW protocol while being future-ready to operate on ETH’s upcoming PoS upgrade.

The platform witnesses significant upgrades that impart certain qualities of CeFi platforms without affecting decentralization. One such sought-after feature of CeFi is the availability of collateral insurance. While such an option is not available with other DeFi projects, Holdefi solves the issue by separating the collateral deposits from borrowers and liquidity provided by investors into different pools. That way, the collateral won’t be utilized, and borrowers can withdraw it at any time, thus eliminating the need for insurance.

The separation of liquidity and collateral pool will also have a positive effect on Holdefi when ETH 2.0 is implemented as it will speed up the process while keeping transaction costs at a minimum.

Using HLD

HLD is a native ERC20 utility token of the Holdefi ecosystem. Apart from being a mode of value exchange within the ecosystem, it also acts as a governance token imparting voting rights to tokenholders. It can also be used for liquidity mining, staking, and revenue sharing between the participants.

The project has set the maximum supply cap for HLD at 100 million of which 13 million was offered to investors through private and public sales. Recently, Holdefi successfully concluded its private and public sale.

The public sale, a 2-day event starting March 31 was completely sold out within hours of launch. Meanwhile, those who didn’t participate in the token sale can purchase HLD on Uniswap and PancakeSwap

Buy HLD and HODL?

Holdefi is one of the few platforms that has made significant improvements to DeFi lending. It offers a lot of flexibility to users while maintaining strong security features. The future-proof design of Holdefi ecosystem is an added advantage that will make it popular with the crypto community.

While there is no definitive forecast on whether HLD will be an asset due to the volatile nature of crypto markets, Holdefi is an innovative project that is playing a major role in shaping DeFi platforms of the future.

Learn more about Holdefi at – https://holdefi.com/

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.newsbtc.com/news/company/holdefi-a-unique-decentralized-lending-platform-shaping-the-future-of-defi/

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