Ethereum is about to make the most significant change in its history. The so-called Merge will definitely kill ETH mining as soon as in June 2022. What to mine after Ethereum goes to Proof-of-Stake?
Bitcoin mining requires so much computational power now, that if you have enough money to buy those hell machines, why do you need mining Bitcoin at all?
All right, that’s a joke. Mining Bitcoin is still very profitable, but you do need enormous investments to take part in it.
As for Ethereum, mining is still possible with usual gaming GPUs. And it is quite profitable, especially if you have access to cheap electricity and know where to get hardware discounts.
Other tokens that you can mine these days trail far behind Ethereum in terms of profitability.
Keeping all that in mind, it is fairly easy to conclude that as soon as Ethereum switches to Proof-of-Stake, the mining industry will be effectively killed.
The transition is planned for June 2022. There are no signs of troubles that might prevent this to happen.
Ethereum switching to Proof-of-Stake explained
Ethereum, the blockchain powering Ether, migrates to a Proof-of-Stake model due to an upgrade slated for this year. That’s the Merge (sometimes called ETH 2.0) that the Ethereum community is really excited about.
Currently, Ethereum has both a Proof-of-Work and Proof-of-Stake chain running in parallel. While both chains have validators, only the Proof-of-Work chain currently processes users’ transactions.
Once the Merge is complete, Ethereum’s blockchain will shift fully to the Proof-of-Stake chain, called the Beacon Chain. Proof-of-Work mining will simply become obsolete.
Validators who want to stake Ether and participate in the Beacon Chain can earn yields in return for their support. The more Ether a validator stakes, the higher likelihood they’ll be picked for a reward.
Once the Merge is completed there will be no more need in mining. Basically, the miners will be switched of the Ethereum network.
What to mine after the Merge?
There is a huge collective hashrate mining ETH right now. Where will it all go once the Merge happens?
Well, if you listen to the biggest mining pools, you will feel endless optimism all around.
Guys from NiceHash or 2Miners keep calmly saying that the hashrate will be distributed to other coins like Ravencoin, Ethereum Classic, Ergo, Conflux, Cortex, Firo, and others.
Yes, they admit these coins are currently less profitable for mining. Even now when there is very little hashrate pointed to their direction.
After most ex-Ethereum miners switch to these coins, it will cause higher difficulty in mining. the block reward will be split among a higher number of miners than currently. Statistically, you will receive smaller amounts of coins than today with the same hardware. Consequently miners will experience significantly lower profitability than now, before the ETH 2.0.
Only if the prices of these coins increase, the mining will be more profitable.
But nobody knows how things will turn out to be.
Maybe a huge flow of miners to some previously unknow coins will cause them to rise. And maybe not.
ETH might as well jump really high after switching to Proof-of-Stake, thus pushing less known coins even deeper into the shadows.
Is there a coin that might become the next Ethereum?
Well, actually there is.
You might not remember, especially if you are relatively new to crypto, that current Ethereum is a fork of the original one.
Due to security concerns Vitalik Buterin and his colleagues decided to make a more secure fork and moved away from the original concept of Ethereum, which stayed alive under the name Ethereum Classic (ETC).
It’s also working under a Proof-of-Work model.
The fate of Ethereum Classic was not that bright after all. It has always been in the shadow of the new Ethereum. The success if the infamous 51% attack in 2020 nearly destroyed the reputation of ETC. And some analysts say that privacy concerns will always be somewhere in the air when the name Ethereum Classic is mentioned.
And of course, miners weren’t that eager to give their hashrate to Ethereum Classic given that the reward was much smaller than those paid for mining “the big” Ethereum.
But everything is changing rapidly.
Some experts say that the Merge will be a blessing for Ethereum Classic. Lots of miners will have free capacities and will be willing to use them to any crypto that can be mined with profit.
Why not mine ETC then?
Well, these guys might be right.
ETC surges. Why?
One thing now clearly points to some strong belief the market has in ETC.
While Bitcoin increased 13% during the last two weeks, now reaching $47,000, the Ethereum Classic is doing much better.
Believe it or not, but ETC surged 103% between March 13 and March 24, 2022, starting from $26 and peaking at $48.
Experts confirm that the renewed interest in ETC was likely spurred by speculation that the Ethereum merge to Proof-of-Stake later this year may cause miners to migrate their hashpower to the Ethereum Classic Network.
Interestingly, some experts dare to say that the increase in the mining hashrate will help make ETC network more secure. And thus add to its reputation still suffering from the past bad stories.