Ethereum Mining: Is It Still Worth It? (2023)

Ethereum Mining: Is It Still Worth It? (2023)

Ethereum was founded in 2013 by programmer Vitalik Buterin. Development work and crowdfunding started in 2014, and the network launched on July 30, 2015.

Anyone may create Decentralized Applications (dApps) that are permanent, irreversible, and interact with users on Ethereum.


Today in 2023, when you speak of “Ethereum”, there is no need to explain yourself. With a token price of over $1500 and a market cap of over $189 billion, Ethereum has maintained its position as the second-biggest cryptocurrency In the world.

I am a crypto and blockchain enthusiast interested in different crypto investment methods. One of the easy and popular ways of investment is crypto mining. So, besides investing in tokens, I also wanted to invest in mining.

When I was first starting out in 2009, there was only one method called Proof-of-Work (PoW). But today, mining is done differently. Many blockchains today have picked up the Proof-of-Stake (PoS) method, which I will explain further in this article, and Ethereum has been doing so since September 15, 2022.

I wanted to understand how mining can be profitable in 2023. So, I’ll share what I’ve gathered from my research, and we’ll also cover other questions, such as the differences between PoW and PoS mining. Let’s get started!

PoW and PoS mining

Crypto mining: A brief explanation

Crypto mining: A brief explanation

The ability of cryptocurrencies to function as a peer-to-peer (P2P) decentralized network without the need for middlemen is dependent on cryptocurrency mining.

Mining is the process in which transactions made over the blockchain network between participants are verified and added to the distributed public ledger. Additionally, cryptocurrency mining adds new blocks to the current circulating supply.

Crypto mining: A brief explanation

Let me simplify the mining process for you: Think of a simple wire transfer in a bank. You want to transfer $100 to your friend, Becca.

The said amount transfer request first goes to the bank; the bank personnel confirms that you have a balance of $100 to send to the receiving account, then $100 with a transaction fee is deducted from your account, and the $100 is added to Becca’s account.

The transfer is then recorded in a book called a “ledger” so that there is evidence of the made transfer and the bank can approve it with other banks. For this, they deduct a transfer fee as an incentive for the bank personnel to track the transfers thoroughly. Now, all that is done with technology and machines.

If you see yourself as someone who likes to dabble in different trading strategies, mining is another way to make money in the cryptocurrency market.

Let’s discuss the mining of cryptocurrencies using the first decentralized cryptocurrency, Bitcoin, as an example. A peer-to-peer (P2P) network of miners is in charge of running and maintaining the Bitcoin (BTC) blockchain.

A node in the network known as a miner (just like the bank personnel) gathers, verifies, and adds transactions to the blockchain. When a miner successfully adds a valid block to the blockchain, a process known as Bitcoin mining, the network pays them with cryptocurrency – in this case, with Bitcoin. This is how new Bitcoins are added to the market.

The process above is recorded on a distributed ledger which means, unlike the banks where they had a copy of transactions just for themselves, everyone in the network has a copy of all the transactions.

This is just a short and straightforward explanation of what Proof-of-Work (PoW) mining is. If you want to dive deep into the advanced process of PoW, you can always read the Bitcoin whitepaper.

You should know that there are three preferred mechanisms of mining: Proof-of-Work (PoW), Proof-of-Stake (PoS), and Delegated Proof-of-Stake (DPoS).

With that being said, I want to discuss whether Ethereum is still worth mining. Moreover, the crypto tax has recently been a critical issue in the cryptocurrency market that most governments are paying more attention to, and mining is no exception.

Further reading

Ethereum Mining: Before The Merge

Ethereum Mining: Before The Merge

Initially, the Proof-of-Work(PoW) consensus process was used by the Ethereum network.

As a result, certain types of economic attacks were stopped, and the Ethereum network’s nodes could agree on the current status of all the data stored on the Ethereum blockchain.

Ethereum, however, stopped utilizing proof-of-work in 2022 and began using Proof-of-Stake (PoS) instead.

As mentioned earlier, on September 15, 2022, the Ethereum network stopped using the PoW consensus and switched to PoS. So, how did Ethereum’s old system of PoW work, and why was it changed? When Ethereum used PoW, transactions were processed into blocks. Each block contained:

  • Block difficulty – for example, 3,324,092,183,262,715
  • mixHash – for example, 0x44bca881b07a6a09f83b130798072441705d9a665c5ac8bdf2f39a3cdf3bee29
  • nonce – for example, 0xd3ee432b4fb3d26b

To find the “nonce” for a block, miners must compete in a challenging game of trial and error using the proof-of-work protocol, Ethash. To the chain could only be added blocks with a valid nonce. A miner competing to create a block had to repeatedly run a dataset through a mathematical function that could only be obtained by downloading and processing the entire chain.

A mixHash below a target defined by the block difficulty was produced using the dataset. Trial and error is the ideal method for learning how to execute this. The said trial and error was done by high-performance Graphics Processing Units (GPUs) used commonly in computers. But later, miners used them in rigs where they could use several GPUs simultaneously to process the entire chain.

This helped the miners to verify more blocks to the chain and reap more rewards. You can read more about how the Ethereum PoW works precisely to get more advanced information. This then went viral, and everyone started using GPU rigs – it even became a business for people who assembled, ran, and sold GPU rigs.

With these kinds of businesses running, people needed to know the return on their investment. As a result, web developers designed websites where you could approximately calculate how much you would earn when you had your desired GPU rig assembled based on the number of GPUs, location, i.e., cost of electricity, hash rate, and watt power used, as you can see in

hash rate and watt power

Using a GPU mining calculator, you could see your long-term cost in terms of the GPUs you bought and the profits you earned. Consequently, GPU prices went through the roof after they became so popular among the miners. This led to miners only verifying a transaction if the reward was worth it, leading to higher gas fees.

This caused a malfunction in Ethereum scalability. At the same time, using a lot of energy resources to earn money angered many environmentalists. All these important matters were discussed in the Ethereum community, where the Ethereum developers became aware of such problems and decided to take action accordingly.

Their solution was to dismiss the PoW protocol and switch to PoS. The plan was already in the works, but the public controversy surrounding PoW hastened the switchover. Now that I have shared this information, I want to explain how Ethereum mining works after The Merge.

Further reading

Ethereum: After The Merge

Ethereum: After The Merge

The consensus algorithm used by Ethereum in 2022 is called proof-of-stake (PoS).The proof-of-stake mechanism is more energy-efficient, more secure, and better for adopting new scaling solutions than the prior proof-of-work architecture.

The crypto community used to call this version Ethereum 2.0, but to avoid confusion, the founders and developers gave it the name “The Merge”.

Ethereum: After The Merge

The Merge is a big step forward for Ethereum. As Vitalik Buterin said on his Twitter account: “And we finalized! Happy merge all. This is a big moment for the Ethereum ecosystem. Everyone who helped make the merge happen should feel very proud today.”

After the Merge, Ethereum started using the PoS protocol as their consensus mechanism, and this brought along a lot of improvements:

  • Improved energy efficiency since proof-of-work computations use a lot of energy.
  • Lower access barriers and fewer hardware requirements mean new blocks can be made without expensive equipment.
  • More nodes safeguarding the network, reducing the possibility of centralization.
  • Lowered energy demand, meaning less ETH must be issued to encourage participation.
  • Economic penalties making 51%-style attacks for an attacker much more expensive than proof-of-work.
  • If a 51% attack manages to get past the crypto-economic barriers, the community can turn to social recovery to restore an honest chain.

Again, if you want in-depth information on the matter, read Ethereum PoS. How will they incentivize people to migrate from PoW to the PoS network? They are using this phenomenon called the Ice Age, where people eventually must migrate to the PoS protocol.

Moreover, a user must execute three different pieces of software, an execution client, a consensus client, and a validator, and deposit 32 ETH into the deposit contract to participate as a validator. Users who deposit ETH are added to an activation queue that controls the rate at which new validators can join the network. Following activation, peers on the Ethereum network send new blocks to validators.

The block’s delivered transactions are carried out again, and the block’s validity is verified by examining the block’s signature. After that, the validator broadcasts a vote (known as an attestation) to support that block throughout the network.

The nodes who deposit 32 ETH into the contract will earn 2 to 5 ETH annually. But before The Merge, ETHW, a hard fork of the Ethereum network that keeps the PoW consensus algorithm, was developed, resulting in a win for ETH miners.

Who is behind ETHW? Chinese miner Chandler Guo introduced the PoW-based Ethereum blockchain in opposition to the PoS consensus protocol. Users of ETHW experienced accessibility problems, notwithstanding the possibility that creating the PoW Ethereum chain would favor miners over stakers.

That being said, I don’t recommend getting into ETHW. If you are interested, I urge you to research it thoroughly and invest at your own risk.

Further reading


Can I mine ETH using GPUs?

No, you can’t. After the Ethereum Merge, they migrated from PoW to PoS consensus mechanism; you cannot use the GPUs for mining Ethereum.

Can I mine ETC and ETHW using GPUs?

Yes. You can mine Ethereum Classic (ETC) and Ethereum PoW (ETHW) using GPU and Application-Specific Integrated Circuit (ASIC) miners.

How many ETH tokens are needed to do PoS mining?

You need at least 32 ETH to start as a node in the PoS mining protocol.

How much do I earn if I stake 32 ETH?

Annually, you will earn between 2 to 5 ETH.

Can I stake ETH if I don’t have 32 ETH?

It is possible to stake less. Check out the options and choose the one best for you and the network.


There you have it! Is Ethereum worth mining in 2023? Well, if you have 32 ETH that you don’t need, you can earn 2 to 5 ETH annually after you stake it. Also, you can stake your ETH in staking pools and centralized exchanges, but the returns are so low.

PoW Ethereum mining is out of the picture, and you cannot earn from that. On top of that, ETHW cannot be trusted as it is a hard fork of Ethereum and has a different team behind it.

In my opinion, the best way of getting returns on your crypto assets is by HODLing. Nevertheless, when you stake your crypto asset in a staking liquid pool or the network to become a node, it is counted as HODLing, and you earn rewards for staking. Also, you can mine many more tokens, which you will find on Coinmarketcap website.

In the end, it is you who can decide what’s best, so do your own research before you invest. Thank you for staying with me through this article. I wanted to share my Ethereum mining research and hope you found it helpful.

Further reading