AN ODE to MINERS - Analyzing Ethereum Proof of Work and Miner Activity
AN ODE to MINERS - Analyzing Ethereum Proof of Work and Miner Activity
The Merge is days away. Many thought this day would not come, but we are finally seeing Ethereum move from proof of work to proof of stake. No more relying on miners, no more guzzlers of electricity, no miners more dumping ETH on the open market to cover costs. While many are excited about the move, the miners of the Ethereum network should be saluted for all the work they have done to keep the Ethereum network alive. In this dashboard, Ethereum Proof of Work’s history will be analyzed with a special focus on the characteristics of miners. For miners, the dashboard covers the # of Blocks per Miner, the top miners, the time since a miner last mined, the average number of transactions mined per block, and many more metrics. Ethereum’s Proof of Work has been an incredible ride and this dashboard should cover most of its history.
Insights
-As demand for Ethereum grew, the avg block size has increased. The peak of the average block size was around 100k in June 2022 and has fallen off a bit. -Similarly, the average number of transactions per block has increased with the demand (and hype) of Ethereum. Ethereum saw a large spike in the average number of transactions in both the 2017 and 2021 bull run. -The peak number for the average number of transactions per block was in April 2021, which was in the beginning of the NFT craze for Ethereum.
-The average number of seconds per block has remained relatively stable throughout its history at around ~13-14 seconds between blocks. -There have been a few months where a spike in between the time between occurs with the most recent being in June 2022--
Mining Trends over Time
There have been over 5600+ miners on the Ethereum network. In the early days of Ethereum, there was an explosion of miners as the costs to mine were relatively cheap, however as Ethereum’s network grew, it became more expensive for miners to mine $ETH. Since 2020 there have been around 60-115 active miners per month. The numbner of new miners to the network has been around 15-30 with each month having less and less. As the merge has grown closer the number of new miners coming online has drastically decreased with less than 10 new miners each month. In the month of the merge (Sept 2022), we have seen 68+ active miners. What’s also interesting is that someone must not have gotten the memo as there is 1 new miner to the ETH network this month
All Time Miner Score Board
The 9 largest Ethereum Miners have mined close to 70% of Ethereum’s total blocks. In fact, the largest miner has mined 21% of Ethereum's total blocks! 36% of Ethereum Miners only mined one block with close to 65% of Ethereum miners mining less than 10 blocks each. 337 miners have mined more than 500+ blocks. What is kinda interesting about this is that mining is HIGHLY centralized. Luckily with proof of work, miners for the most part were selling ETH to cover costs and make a profit. This could be concerning though for proof of stake if validation is highly concentrated amongst a few parties as then they would control most of the network validation.
100 Largest Miners
Looking at the 100 largest miners, it can be seen that for the most part they started mining early (2015-2017 range). Depending on how long they have mined, determines how the avg number of transactions (Those that stopped mining tend to have very low transactions per blocks whereas those who have kept mining have higher score) We can also see that the average difficulty to mine a block is correlated with the average number of transactions (and most likely time / demand of the Ethereum network)
Miners in the Past Year
There have been 197+ Miners this year that have mined over 2.3+ million blocks. The largest miner this year (and largest miner of all time) mining still close to ~29% of total blocks. For the most part, the top miners of all time are still on the list of top miners for the past 365 and have remained more or less in the same position of the number of blocks. If you were a top 100 miner, you would have mined at least 34 blocks which would result in 68 ETH and around to $122,400 (ETH price of $1800). It appears that some miners do prefer to mine blocks with lower txs (see the drop off in some miners avg transactions vs their rank in # of blocks mined). Another piece to look at is that AVG difficulty and block and the average # of transactions is not nearly as correlated with some being inverse of each other. The above may point that difficulty increased with demand and time of ETH vs AVG # of transactions.
Conclusion
Packing 7 years of Ethereum Proof of Work into one dashboard can be a lot. Some of the top insights to take away: -The number of blocks per month has been relatively stable -The number of active miners and new miners has slowly decreased as mining has become more expensive and we draw closer to the merge -Total Blocks mined is severely concentrated with 9 miners making up close to 70% of total blocks mined -Close to 36% of miners have mined only 1 block with 65% mining less than 10 txs -The average number of transactions per block by a miner is dependent on when the time they were mining. Looking at the past year, some miners prefer to mine transactions with lower number of transactions whereas some prefer higher.
If you enjoyed this, I hope you all continue to follow my work as we head into the unknown land of Proof of Stake. See you on the other side of the merge.
Number of Blocks Mined
Ethereum Proof of Work has seen over 15.5 MILLION + blocks mined. Throughout its history, Ethereum # of blocks miner per month has remained relatively steady with the average # of blocks mined per month being anywhere between 180k - 200k Blocks Mined per Month (Current Rolling AVG is around 178k Blocks per Month).