Ethereum: Explain the math behind mining profitability calculators

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Ethereum: Understanding mathematics behind mining profitability computers

As a blockchain enthusiasts, we are always curious about the interior works of cryptocurrencies such as Ethereum. An aspect that is crucial to anyone who is interested in mining profitability calculations is understanding how it works. In this article, we will sink into the mathematical concepts behind the mining computers such as the mentioned ones.

What are mining computers?

Mining computers offer a simple and accessible way to calculate the expected profit from the Ethereum miniet or other cryptocurrencies. They consider various factors, such as block reward, transaction taxes, difficulty level and more. The purpose is to give the miners an idea if they make a profit by investing their power of calculation.

Basic calculations

To create your own mining computer, you need to understand the basic calculations involved. Here are some key concepts:

• Block reward : Each block in the Ethereum network contains 6 new (ETH) ether as a reward for miners who successfully solve the complex mathematical puzzle known as „work proof“ (POW). The reward of the block is fixed at 50,000 ETH per block.

• Taxe de tranzacție

  : Taxele de tranzacție sunt deduse din suma totală cheltuită de utilizatori în fiecare tranzacție. For example, if a user sends 10 ETH to another user, will pay a 1 dollar charge. In Ethereum, transaction fees range from 0.0005 to 4.50 ETH per transaction.

• Energy costs : The energy costs associated with mining are the main factor of limiting profitability. As the electricity prices fluctuates, the energy cost of your miner will increase or decrease accordingly.

Mining computer formula

To calculate the expected profit using a mining computer like the one you mention, you can follow these steps:

• Calculate the reward
  block : Multiply block (n) by 6 to get the total amount of etho rewarded on the block.

• Calculate transaction fees **

• Calculate
  Energy cost : Estimate average energy consumption depending on your electricity costs, assuming 1 kWh = $ 0.12 (this value may vary depending on your location and supplier).

• Calculate
  PCRONIZED PROFIT ON THE BLOCK : Decrease total transaction fees in total block reward.

• Repeat the 3-4 steps for more blocks to calculate the expected profit.

Example of mathematical formula

Let’s take an example with a block reward of 50,000 ETH (n = 1), a transaction fee of $ 0.002 per transaction (x = 10000 transactions) and an estimated energy cost of $ 0.15/kWh:

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Profit expected on the block:

50,000 USD (block reward) - $ 2 (transaction fees) = $ 49.998

Energy Cost: assume 1 kWh ≈ 0.12 USD

Average energy consumption: $ 0.12/kwh \* 10^6 kWh/an ≈ 120 kw-hr

Profit expected per hour: 49,998 USD / 8760 HR ≈ 5.67 USD / hour

Example of Google Computies

To create your own Google spreadsheet, you can use the following formula:

= ((50,000 x 6) - (2 x 10,000)) ÷ 12000

This formula calculates the expected profit on the block, lowering the transaction taxes from the total block reward and then dividing at the energy cost.

Tips and Variations

• Use a different calculation method if you prefer. For example, you can calculate the expected profit according to the number of transactions or mined blocks.

• Consider factors such as electricity costs in your region when calculating energy expenses.

• You may want to add additional columns for the difficulty level of the block (ie, calculations based on difficulties), which involve more complex mathematical concepts.

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