As we strategy the Ethereum merge, the opinion of the crypto-community has been extra vocal than ordinary. The much-anticipated ETH 2.0 will change the consensus mechanism of the blockchain to a proof-of-stake mannequin, placing ETH miners out of enterprise. Aside from the potential of them leaving the mining business, there’s a risk that they select a tough fork within the Ethereum community and even attempt to change to a distinct blockchain.
What is occurring?
Not too long ago, Hongkai “Chandler” Guo, a former ETH miner, talked about in an interview that a number of Chinese language Ethereum miner makers reached out to him to provoke forking efforts. In line with journalist Colin Wu, there are about $5 billion value of graphics card miners and ASIC Ethereum miners (A11 E9) that have to discover a approach to proceed mining after the merger.
At present, there are roughly $5 billion value of graphics card miners and ASIC Ethereum miners (A11 E9) that have to discover a approach to proceed mining after Ethereum switched to POS in September. Most are from Chinese language miners.
— Wu Blockchain (@WuBlockchain) 29 July 2022
Though transferring ETH to the PoS mechanism will considerably cut back energy consumption, miners are involved about how they may proceed their operations. For some, a tough fork that may enable them to proceed mining crypto is a good suggestion.
Whereas there’s quite a lot of hype within the crypto-community concerning Ethereum 2.0, as at all times, opinions are diverse. In truth, in a latest Twitter thread, MakerDAO identified that the merge may very well be doing extra hurt than good.
Implications for the Producer:
• Minimal impression if all externally supported asset issuers help the merge improve.
• If a number of issuers help a PoW fork, this might have a major impression on the DEX liquidity pool and different protocols that settle for property as collateral.
— Maker (@MakerDAO) 5 August 2022
Ethereum miners have confronted a number of challenges over the previous a number of months to generate revenue from mining ETH. The profitability of ETH miners has been severely affected by the collapse of the cryptocurrency market in addition to the rising electrical energy costs world wide.
In line with information from Bitinfocharts, mining was much less worthwhile in July 2022 than in 2021, when it was solely 0.025 USD/day for 1 MHash/s.
Therefore, going for a tough fork doesn’t look like a viable possibility for the miners as they may nonetheless wrestle to make income. One other indication of the minimal likelihood of a tough fork is a lower within the total hash fee of the Ethereum community because it suggests an outflow of miners from the community.
Whereas the hash fee of the ETH community plummeted, the Ethereum Traditional blockchain noticed a large inflow of recent miners. Contemplating how Ethereum Traditional has carried out over the previous month, it may very well be a viable various to ETH for miners.
As ETC operates on a PoW consensus mechanism, a brand new onerous fork within the Ethereum community appears illogical. Given the presence of extra worthwhile options to Ethereum, the possibilities of one other onerous fork are slim.