The Ethereum Merge- the most anticipated event in the crypto space is hours away. It has been the final stage of Ethereum ever since its inception. After the Merge, Ethereum will function in an environmentally friendly manner and shift from a Proof of Work consensus to a Proof of Stake one. But such a shift in functionality is bound to affect the Ethereum ecosystem.
Since the Proof of Stake consensus model is more inclined to validators staking crypto to help secure the system and does not compensate miners for solving mathematical puzzles, miners will be the ones to be most negatively affected by this change.
How Miners Are Changing Their Mining Strategies
Miners have reaped many benefits in return for securing the Ethereum PoW blockchain, but with the switch to PoS, things will change for the miners. There are two things miners can do — mine some other GPU mineable PoW crypto or mine on a fork of Ethereum.
Miners like F2pool and Hive blockchain plan to explore other blockchains for mining. F2pool has decided to accept the end of the PoW era in Ethereum and is planning to end Ethereum mining after the Merge. Hive blockchain with 6.5 Terahash of Ethereum mining capacity plans to switch its mining focus to other cryptos compatible with mining with its GPU.
The easiest switch for miners will be an Ethereum PoW fork, as their mining system requirement is the same and won’t require much modification. They can either set up their mining shop focusing on Ethereum Classic or a newer proposed fork ETHPoW.
Turning to other PoW blockchain alternatives might seem a good resort for miners, but it eventually will flood other blockchain networks resulting in an increase in mining difficulty and a reduction in profitability.
Miners can always move with the tides and contribute to Ethereum by becoming a validator in the PoS consensus. The largest Ethereum mining pool, Ethermine, is doing the same. They have unveiled a new staking pool for users to help maintain the integrity of the Ethereum blockchain. It won’t be as rewarding as mining, but it is still an option.
While many miners are looking for alternatives to keep mining, some have decided to stop mining as a whole and use their GPUs to focus on other technologies. Hut8 mining will pivot away from mining. In August, they teamed up with Zenlayer to work on cloud services in Canada.
In a race to the bottom for profits, the Ethereum Merge may compel many cryptocurrency miners to give up and sell their pricey mining equipment as well.
Welcome Merge; Goodbye Miners
The Merge is scheduled for 15th September, once the blockchain reaches Terminal Total Difficulty of 58,750,000,000T. The Merge will move the Ethereum network from its current state by gradually switching out miners and replacing them with validators in its ecosystem. Miners will need to decide where to spend their resources to keep earning good profits.