The crypto space is celebrating the innovative migration of the Ethereum mainnet; however, this merge does not mean the same for everyone as it brings some woes for miners. The mining difficulty for the Proof-of-Work (PoW) miners continues to rise as the newly merged Proof-of-Stake (PoS) model of Ethereum does not require mining Ether.
PoW Miners Are Giving Up
The Ethereum merge has successfully switched from the Proof-of-Work (PoW) to the faster and energy-efficient Proof-of-Stake (PoS) consensus mechanism, affecting the $19 billion PoW mining industry. Chandler Guo, one of the fork’s significant advocates, believes that only 10% of PoW miners are mining ETHPOW (Ethereum Merge fork) and ETC (Ethereum Classic) to continue their mining journey. He also noted that miners with cheap or free electricity would survive till the end.
Elaborating on the PoW fork, Chandler Guo stated, “Some miners have free electricity and can continue to work on that, the other 90%, bankrupt.”
The PoW fork did not go smoothly as users were making complaints about setting up a crypto wallet on the blockchain network. Guo responded, “Some people can connect, some people can not connect. It depends on your speed of the network.”
What Is Next For Ethereum Miners?
The Ethereum mining industry begins a fresh start, just like the Ethereum network. The Ethereum network’s migration to the PoS model will not require mining as Ethereum 2.0 will solely depend on the staking of Ether to validate and secure each transaction on the network.
Ethereum miners have two options from here to continue their mining. Miners can either switch to ETHPOW, ETC, and other altcoin projects with enhanced mining rigs to continue mining, or they can sell their mining rigs and invest that money to buy Ether and become validators of the newly migrated Ethereum network.
However, there are only a few blockchains that run on the PoW mechanism, and their profitability is relatively low. Miners are currently switching to the Ethereum Classic (ETC) as it has seen a spike in its mining demand. However, it can bring mining difficulty, too, as a large number of miners can cause a drop in the hash rate.
In July 2022, Chandler Guo mentioned that the Ethereum merge would lead to a significant number of job losses for Ethereum miners. Therefore, Guo and his co-developers proposed a hard fork EthereumPoW (ETHW), which would run on the proof-of-work mechanism to offer miners a mining job. It is expected that PoW miners will soon switch to PoW forks to continue their mining rather than give up.