📊Mining Variables

Which variables define the mining profitability?

Mining ETH, or any coin for that matter, is usually a low-risk high yield activity that profits itself not from market volatility but from the intrinsic value of the mined asset itself. By mining said asset, one can generate profit regardless of the direction of the market, but its important to note that there are still some variables that define how high those profits may be.


First of all one must understand that every transaction on the ETH chain demands a fee (which miners take as payment for processing that transaction). That fee, usually named "Gas", is nothing more than the price that a user is willing to pay for a transaction to be successfully processed. At higher Gas, the higher the attractiveness for miners to take said transaction, getting it done faster in the process.

If the average Gas per transaction is higher, miners will receive higher fees in average from each transaction "mined" and vice-versa.


GPU mining (graphics processing units) is a type of mining that relies entirely on the processing/hashing power of said units. Why is that? For a block of transactions to be successfully verified (mined), a certain hash needs to be calculated. The speed at which a node can calculate these hash operations is usually defined as Hashrate. Thus, with a higher hashrate, a node or miner can run more hash operations to find the value needed to validate blocks on the blockchain. This on average equates to more rewards being paid to the miner for the higher amount of blocks they were able to validate.

Miners usually participate in mining pools that distribute the ETH rewards accordingly depending on the pool participation, which is the % of hashing power that the miner has compared to the whole pool. With this concept in mind, we can understand that the global hashrate of all miners in the network replicates a pool, meaning that if the global hashrate decreases, our reward per hashrate increases (because our % hashrate in the global pool increases) and vice-versa.

So, with a higher overall hashrate, one can reliably get more blocks validated and so more rewards. At TMT we thrive to always keep the same relationship of mega hashes (1 Mega Hash = 1000 Hashes) per $TMT token (1 $TMT = 1 Mega Hash). That way we can distribute new $TMT tokens only if we have the same amount of extra MHs available for purchase.

Therefore, by keeping this relationship 1 to 1 (and assuming a low variability for gas and global hashrate), $TMT holders can be sure their rewards per block will stay constant throughout the whole lifespan of the project.

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