If you have been searching for how to mine Ethereum in 2026, there is a key fact you need to know upfront: traditional GPU mining of ETH is no longer possible. Ethereum completed its transition from proof-of-work (PoW) to proof-of-stake (PoS) back in September 2022, in an upgrade known as "The Merge." Since that moment, ETH has been secured by validators staking coins rather than miners running graphics cards. Understanding what that means, and what alternatives exist today, is essential before you invest a single dollar in hardware or cloud contracts.
What happened to Ethereum mining?
Before The Merge, Ethereum operated like Bitcoin: miners competed using computational power to solve cryptographic puzzles and earn block rewards. GPU rigs were the dominant tools, and Australia had a modest but active mining community, particularly in states with cheaper electricity such as Queensland and South Australia.
The Merge eliminated all of that. Ethereum's consensus mechanism now relies entirely on validators who lock up (stake) at least 32 ETH as collateral to propose and attest blocks. There are no more block rewards for GPU miners. Any cloud mining or hardware mining service still marketing "Ethereum mining" in 2026 should be treated with significant caution, because they are either misleading you or mining a different coin and paying out in ETH as a conversion.
The Ethereum fork: EthereumPoW and what followed
In the immediate aftermath of The Merge, a group of miners forked the old chain and launched EthereumPoW (ETHW). For a brief period this attracted attention from holdout GPU miners. By 2026, however, ETHW has faded considerably in both price and hash rate, and the vast majority of exchanges and developers have committed exclusively to the PoS Ethereum mainnet. Staking your ETH on the real chain is a far more productive path for most Australians.
How to earn ETH rewards today: staking options
Staking is effectively the successor to mining for ETH holders in 2026. It does not require expensive hardware or high electricity bills, which is a significant practical advantage given Australia's relatively high power costs. There are several approaches depending on how much ETH you hold and how hands-on you want to be.
Solo validation
Running a solo validator requires exactly 32 ETH staked directly with the Ethereum network, plus a node running 24/7 with reliable internet. This is the most decentralised option and earns the full validator reward (currently in the 3–4% annual range on the Ethereum protocol). The barrier is the capital cost: at current prices, 32 ETH represents a substantial AUD commitment. For context on where ETH is trading and where analysts expect it to go, see our Ethereum price prediction for 2026.
Liquid staking protocols
Liquid staking platforms such as Lido allow users to stake any amount of ETH and receive a tokenised receipt (stETH) in return, which can be used in DeFi or simply held. This removes the 32 ETH minimum and keeps your capital somewhat liquid. Risks include smart contract vulnerabilities and the fact that the ATO treats staking rewards as ordinary income at the time of receipt, not a CGT event at that point. Always confirm the current tax treatment with a qualified crypto accountant before proceeding.
Exchange staking
Several AUSTRAC-registered Australian exchanges now offer ETH staking directly through their platforms. This is the most beginner-friendly option: you deposit ETH, opt in to staking, and rewards accrue automatically. Fees are typically 10–15% of rewards taken by the platform. If you are still at the stage of acquiring ETH before you stake it, our guide on how to buy Ethereum in Australia covers which platforms support AUD on-ramps and what the compliance requirements look like.
What about GPU mining alternative coins?
Many ex-Ethereum miners redirected their GPU rigs to other proof-of-work coins after The Merge. Coins such as Ravencoin (RVN), Ergo (ERG), and Kaspa (KAS) are among those that have attracted GPU miners looking for PoW-based income. Mining these coins and converting to ETH or AUD is a technically viable strategy, but it carries its own complexities.
- Electricity costs: Australian residential electricity is among the most expensive in the developed world. Mining profitability is highly sensitive to power rates, and margins for GPU miners in Australia are generally thin or negative depending on the coin and rig efficiency.
- Hardware depreciation: GPUs are a depreciating asset. The ATO allows depreciation deductions if you are mining as a business, but the compliance overhead is real.
- Tax on mining income: The ATO treats mined coins as ordinary income at market value on the date of receipt. A subsequent sale triggers a separate CGT event. This stacks your tax exposure in a way that pure investors do not face.
- Noise, heat, and space: Running a mining rig at home is not a passive activity. Cooling, noise management, and fire risk are practical considerations that often go unmentioned in mining guides.
Cloud mining: approach with extreme caution
Cloud mining services sell hash rate contracts, meaning you pay upfront for a share of a remote mining operation's output. The space has a long history of fraud, with many platforms ceasing payouts after collecting fees. If a service promises Ethereum mining contracts in 2026, that is itself a red flag, since ETH cannot be GPU-mined. Legitimate cloud mining services will be explicit about which coin they are actually mining. The Australian Competition and Consumer Commission (ACCC) has previously warned consumers about crypto investment scams including fraudulent mining services.
ATO considerations for Australian miners
Whether you are running a home GPU rig or accessing a cloud service, the ATO's treatment of crypto mining income is clear: rewards are assessable income when received, valued in AUD at that moment. If you later sell the mined coins, that triggers a separate capital gains (or loss) calculation. Miners operating at a commercial scale may be treated as running a business, which opens up deductions for electricity, hardware, and depreciation but also brings GST and income tax obligations. A crypto-specialist accountant is strongly recommended. For a full overview of the current rules, see Australia's crypto tax rules in 2026.
The bottom line for Australians in 2026
Ethereum itself cannot be mined. The question most Australians asking "how to mine Ethereum" are really asking is: how do I earn a return from holding or participating in the Ethereum network? For most people in 2026, staking through a reputable exchange or a liquid staking protocol is the most practical, tax-manageable, and electricity-efficient answer. GPU mining of alternative PoW coins is possible but rarely profitable in Australia given power costs, and carries meaningful tax complexity. Whatever path you choose, ensure any platform you use is registered with AUSTRAC and that you keep accurate records for the ATO.
This article is general information only and does not constitute financial or tax advice. Consult a licensed financial adviser and a registered tax agent before making investment decisions.