As you may know, the price of ETH spiked to ~$335 in late June. At that time, we were hopeful that prices would continue to accelerate northwards. Unfortunately, the price again dropped into the $160s. At the time of this writing, it is approximately $215. Overall, the price trend has been nicely positive since last December, it’s just that prices have not accelerated at a pace where we are able to mine profitably.
Given that we were not able to mine profitably at current prices and given the continued elevated temperatures of summer, the Ensource Managers decided unanimously to turn off the mine in late August, thus preserving the remaining cash balance and life of the cards.
We have decided to give the market until November to potentially show signs of a faster recovery before deciding whether to turn back on the mine or liquidate and return as much cash as possible to investors. There are a few reasons for waiting until November:
- Historically, crypto prices have shown the most strength in Q4.
- Later this month, Bakkt, an international cryptocurrency exchange, is launching in the US.
- Vitalik Buterin, ETH’s founder, recently stated he was “very confident” in the successful scaling of the ethereum blockchain and roll out ethereum 2.0 early in 2020.
We experimented with new and very powerful AMD Radian VII cards. Our hypothesis was that two of these cards could produce the hash power of our present 7-card rigs while using lower draw and producing less heat. This did not turn out to be the case and we concluded that this was not a practical path forward.
We remain in the process of refurbishing all non-functioning cards that are salvageable. We will either use these refurbished cards to mine if we turn the cave back on, or sell them for their highest value if we decide to liquidate.
Please visit the link here for an archive of financials covering 2018 & YTD June 2019.
ETH Proof of Stake
While no final date for a roll-out of proof of stake has been set, some are surmising that 2020 will be the year. Some ETH enthusiasts are interested in what it will mean to “stake” ether, so we wanted to provide the basics here.
The Basics of Staking
In order to begin staking on Ethereum 2.0, you’ll need to run a validator node and lock up your ETH tokens in a deposit. This will allow you to participate in block creation: validators from all across the Ethereum network will be selected to vote on new blocks semi-randomly. Other validators will then agree on the result, thereby achieving consensus.
Staking will allow you to earn rewards, but the precise rate of return is not yet set. Ethereum creator Vitalik Buterin recently proposed setting annual returns between 1.5% and 18%, depending on how much ETH is staked across the entire network. Justin Drake, a lead developer, suggests aiming for a 5% return rate for validators. He also notes that annual returns will include gas returns as well as inflation.
As currently planned, you’ll need at least 32 ETH (~$7000) if you want to stake on Ethereum 2.0. But luckily for your power bill, there are no ASICs involved: staking does not require a powerful computer or special hardware. Drake has suggested that most consumer-grade laptops, or even a Raspberry Pi, will be able to support at least one validator slot. You will, however, need to stay online consistently and be available to validate blocks.
You can bypass some of these requirements if you stake with a pool. RocketPool, for example, manages staking on your behalf: you don’t need to run software or stay online. It also has lower minimum staking amounts: you can stake as little as 1 ETH (~$225). Unfortunately, staking pools usually charge fees, so you may earn less than if you were staking solo.
You’ll be able to begin staking ETH in early 2020. That’s when Ethereum 2.0’s beacon chain, aka “phase 0,” will go live. ConsenSys suggests that this launch could take place as early as January 3rd – the anniversary of Bitcoin’s genesis block – though ConsenSys ultimately concludes that the launch will probably take place somewhat later in Q1 of 2020.
We have been updating our blog with interesting ETH news. Please take a look when you have a chance!
Here are a few other interesting newsworthy items:
-Ensource Capital Team