Aion’s hash power and the substantial mining profitability on the Aion network
Hash power in blockchain is like firepower of a fortress. The more firepower a fortress has, the more capable it is defending its wall. Similarly, the more hash power a blockchain network possesses, the more capable it is defending its network from attackers, or “hacker”. Hash power is often measured in H/s ( hashes per second) or Sol/s (solutions per second). Every network consensus can be unique and depending on the hashing algorithm may not be directly comparable. For example, Ethereum uses ethash which is measured in H/s while ZCash uses equihash which is measured in Sol/s. To enable cross network comparison, we need to establish some common measurement unit.
Graphic Card Equivalent (GCE)
Borrowing the concept of “replacement cost” from our insurance friends, I asked myself: “how many graphic cards are needed to essentially replace the current hash power of each network?”. I chose the Nvidia GTX 1070 Ti because I could obtain reliable mining data for this card. If I can find the “number of 1070Ti cards that is needed to rebuild the network”, I can essentially compare different blockchains’ network sizes using a common measurement unit. Let’s call this GCE (graphic card equivalent).
Extrapolating network size with GCE
After establishing a common unit of measurement, I could begin comparing networks. First, I gathered a list of the top 100 coins (not tokens*) on CoinMarketCap (As of June 11, 2018) and Aion (let’s call this “the 101 coins”) together with their consensus algorithm. Aion was not on the top 100 list because it was not listed on an exchange at the time (it is now). I was only interested in comparing Aion to network with Proof-of-Work (POW) algorithm because those are blockchain in which hash power matters. Second, I studied their hashing algorithm and whether ASIC mining is available. The presence of ASIC mining hardware make it difficult to compare since, ASIC hardware is specialized to a consensus algorithm. Aion uses an ASIC resistant algorithm (Equihash 210,9) and is mined by GPUs at the moment, thus I am only interested in networks with GPU mining. Third, I found the average nethash (network hashrate) by averaging 3 data points (sources below). Similarly, I found the average hash power per 1070 Ti card for each network. With these data, I could extrapolate how many 1070Ti cards are required to replace the current nethash for each network, or network size.
* Coins are asset with their own network. Tokens are asset that lives on other networks. One example of token is ERC20.
Aion’s hash power
I finally had a better idea of where Aion was at with its firepower. Out of the 101 coins, 49 are POW networks, out of which 25 have GPU mining. Except for NEXUS (NXS) with which I could not find enough reliable information, the other 24 networks represent a large spectrum of hash power with the smallest one, Metaverse, having 4114 GCE, and the biggest one, Ethereum, having more than 7 million GCE. The imbalance led to the fact that the average is much greater than the median network size. Aion sat at number 20 in the chart with north of 6000 GCE. Note that I assumed ZCash was GPU-mining only for consistency of this study (I could not find strong enough evidence to prove ASIC mining on the network as of June 11).
The substantial mining profitability on the Aion network
I then asked myself, how are Aion miners rewarded in comparison to other networks? I took the inverse of network size as the probability that a 1070 Ti card can get reward. Then I examined the average block reward, block time and daily reward for POW GPU-mining network. These data, together with the price of the coins allowed us to calculate the revenue that a miner can expect per day with a 1070 Ti on each network (example here). I purposefully omit the cost of electricity out of my analysis because the price of electricity is variable by region and is a point of comparative advantage, while 1070 Ti cards generally consume the same amount of electricity regardless of the network it mines on.
The benefit of Aion mining is clear. Although Aion is relatively small in term of hash power, it is, by a large margin, number one in term of mining profitability with an expected average daily revenue of $ 3.4 per GCE, which is 261% of the average mining profitability of all the POW GPU-mining networks. ETH is right at the average with daily mining revenue of $1.3. Contrary to what happens with network size, the average and median of daily reward are relatively close to each other, proving a good distribution of crypto-mining revenue across networks. I cross checked these numbers with several miners that I know, and I am relatively confident that although these numbers are an estimation, they are not far off from the actual result. Note that this revenue is calculated with the spot price of coins and hash power of network as of June 11, 2018.
Conclusion
By using the GCE method, I was able to find a common measurement unit to compare network size cross chain. Because the Aion’s mainnet is recently launched, the network is small in term of hash power, at 20 out of 24 POW GPU-mining networks. However, the revenue (and hence profit) of mining on the Aion network is by a large margin number one compared to other peers. It is also my expectation that this discrepancy will not continue in perpetuity, and that with more awareness from the mining community, Aion’s mining rewards will regress to the mean as the nethash grows.
If you prefer a simpler plug-and-play version of my analysis, you can also check out Aion’s mining profit calculator at cryptocompare. To start mining Aion, click here.
You can see my full data set with sources here.
