On September 15, 2022, the long-awaited Ethereum Merge finally came true. Long using the Proof of Work consensus mechanism, the Ethereum blockchain has finally moved to Proof of Stake, the same system used by other cryptocurrencies such as Cardano, Solana, and Polygon. As a result, Ethereum’s energy consumption has been dramatically reduced.
There was also another casualty: cryptocurrency mining.
But is cryptomining dead as a result of the merger, or will Ethereum miners have a chance to mine other cryptocurrencies?
What Was Ethereum Mining And Why Did It Stop?
Pre-Merge, the two top blockchains of Bitcoin and Ethereum, Proof of work mechanismThis means that you can mine (lending computing power so that the blockchain can validate your transactions) in exchange for a reward. Every block mined rewards users with a certain amount of cryptocurrency (thousands of dollars per block (plus transaction fees)).To facilitate mining, some Miners organized into “pools” It pools computing power and splits rewards for each block. Rewards are paid according to the computing power contributed by each miner.
Bitcoin was initially minable with consumer hardware (CPUs), but then mining difficulty increased to the point where specialized hardware was used. Mining hardware such as ASICs It is necessary in order to obtain even a small, tolerable profit. However, Ethereum’s difficulty did not rise much. That, combined with the fact that the price of the Ether cryptocurrency has skyrocketed (reaching a record high of $4,800 for him at its peak), makes Ethereum an easy-to-mine blockchain that offers amazing profits even to smaller miners. brought.
For example, with the NVIDIA GeForce RTX 3070, you can mine up to $25 a week, or $100-125 a month (depending on your electricity bill!). With his high-end RTX 3090, he could easily make more than double that. Once I got my invested money back, it was basically quite easy and steady income. The lack of RTX 3000 series GPUs on store shelves was partly responsible for the Ethereum mining rush when they were released in 2020.
Of course, all (good?) things come to an end. Ethereum mining was profitable, but the power consumption generated by its execution was enormous and ultimately damaging to the environment.And the network itself was volatile, and gas prices could skyrocket, making transactions ridiculously expensive. Ethereum 2.0 Merge We aim to solve both problems and move things forward for the greater good Proof of StakeBut in the process, miners lose their main source of income.
Ethereum Mining Alternatives
The general logic is that if Ethereum mining goes away, people will be able to mine something else. While possible (Ethereum 1.0 miners are trying very hard to come up with alternatives), it’s not that simple.
Let’s take a look at some alternatives that miners are considering.
First, the obvious option is to try something else. There are many cryptocurrencies such as Ravencoin, ZCoin, etc.
bitcoin mining Mining is so hard that it makes no sense to try to mine with a regular GPU-based rig. Especially for smaller miners. If you want to see an acceptable profit, Requires ASIC based rig, which can be costly. Bitcoin’s price is volatile, so even if you were profitable at one point, a sharp drop can turn things around completely.
As for other cryptocurrencies, the difficulty may not be high, but most of them do not have a concrete community and as a result are not very valuable.When you mine something, you get rewards from it do it for There is no point in doing so if the reward is basically worth nothing. The maximum you can get from Ravencoin on the RTX 3090 is $25/month, with other cryptocurrencies even lower. Are you actually making money, or are you just wasting resources by damaging hardware and making a few extra bucks instead?
Of course, there is also a fork of Ethereum. Two specific forks have been talked about since the merge. Ethereum Classic (ETC)The original Ethereum blockchain, predates Merge by several years and is a continuation of the first iteration of Ethereum. Ethereum 1.0 is actually a fork of ETC, making it a more popular option.
Additionally, after the merge, a new fork called “Ethereum Proof-of-Work (ETHW)” has also appeared.
Both ETC and ETHW are potential alternatives to Ethereum to keep the dough rolling. In fact, due to the media attention and miners flocking around each cryptocurrency, its price has risen. ETHW was trading around $5 when The Merge took place, and its price was around $8 at the time of writing. coin market capitalization. Look at the Coinmarketcap ETC Chart, the price of that currency fell. Even if they do manage to make it, whether they can maintain that momentum is another matter. Simply mining something does not necessarily increase its value. This is a question of supply and demand. There may be a lot of supply, but without demand there is no value.
according to TheNewsCryptChandler Guo, one of the organizers of the ETHW fork, believes that the price of ETHW will eventually catch up with Ethereum over the next decade. He is very optimistic about it, but our outlook is more uncertain. Most cryptocurrency miners aren’t involved long term, they don’t mine anything with blind faith in the concept or the hope that he will see the price go up within 10 years. they want money now And currently, at the time of writing, neither ETC nor his ETHW are profitable for mining. At best, you only get a few cents each day.
Cryptomining is dead (at least for now)
Unless a new shiny alternative to Ethereum comes along that people actually want to use for non-mining purposes, GPU crypto mining is effectively dead. If you are using a GPU-based rig, there is essentially no purpose to mine at this time.
It will damage your hardware, increase your power bill, and all for a few cents. It’s not worth it if you ask us.