How does the limited supply of Ethereum affect its mining process?

1 answers

• Dec 26, 2021 · 3 years ago
  The limited supply of Ethereum plays a crucial role in its mining process. With a fixed supply, the mining rewards are distributed among a smaller number of miners, increasing the competition for these rewards. Miners need to invest in high-performance hardware and constantly upgrade their equipment to stay competitive. The limited supply also affects the profitability of mining. As the supply decreases, the value of Ethereum tends to increase, making mining more profitable. However, it also means that the mining process becomes more challenging as the difficulty level adjusts to maintain a consistent block time. Overall, the limited supply of Ethereum creates a dynamic and competitive mining ecosystem where miners need to adapt to changing conditions to maximize their rewards.
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