Miners and ETH 2.0 – Where Are They Now?


As we approach the Ethereum Merge, the opinions of the crypto community were more outspoken than usual. The highly anticipated ETH 2.0 will turn the blockchain consensus mechanism into a Proof-of-Stake model, driving ETH miners out of business. Aside from the chance that they will leave the mining industry, there is a possibility that they will opt for a hard fork into the Ethereum network or also try to move to another blockchain.

What is going on?

Recently, Hongcai “Chandler” Guo, a former ETH miner, mentioned in a interview that multiple Chinese manufacturers of Ethereum mining machines approached him to initiate forking efforts. According to journalist Colin Wu, there are nearly $5 billion worth of graphics card mining machines and ASIC Ethereum mining machines (A11 E9) that need to find a way to continue mining after the merger.

While the shift from ETH to a PoS mechanism will significantly reduce electricity consumption, miners are concerned about how they will keep their operations going. For some, a hard fork that allows them to continue mining the crypto is a good idea.

While there is a lot of hype in the crypto community about Ethereum 2.0, as always, opinions are diverse. In fact, in a recent Twitter thread, MakerDAO pointed out that the merge could do more harm than good.

Miners dilemma

Ethereum miners have faced several challenges in recent months to make a profit from mining ETH. The profitability of ETH miners has been hit hard by the collapse of the cryptocurrency market and rising electricity prices around the world.

According to Bitinfocharts statistics, mining was less profitable in July 2022 than in 2021, when it was only 0.025 USD/day for 1 MHash/s.

Source: BitInfoCharts

Therefore, choosing a hard fork does not seem a viable option for miners as they still struggle to generate profits. Another indication of the minimal possibility of a hard fork is the reduction in the total hashrate of the Ethereum network, as this suggests an outflow of miners from the network.

Source: 2miners

bottom line

As the hashrate of the ETH network declined, there was a huge influx of new miners on the Ethereum Classic blockchain. Given how Ethereum Classic has performed over the past month, it could be a viable alternative to ETH for miners.

Since ETC operates on a PoW consensus mechanism, a new hard fork in the Ethereum network seems illogical. Given the presence of more profitable alternatives to Ethereum, there is little to no chance of another hard fork.

Source: 2miners





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