Ethereum Merge means huge implications for all crypto mining industry

    07 Sep 2022

    The Ethereum Merge could flood the crypto industry with out-of-work miners, impacting not only Ethereum but all PoW coins. This is likely to force many crypto miners to give up and abandon their expensive mining rigs amid plunging profits.

    As Cointelegraph reported, the transition of the Ethereum blockchain from a proof-of-work (PoW) consensus is likely to flood the crypto mining sector with out-of-work Ethereum miners, impacting all PoW tokens. 

    Andy Long, CEO of White Rock, a Switzerland-based digital asset technology company with Bitcoin mining data centers in Texas and Sweden, told Cointelegraph he believes the upcoming Ethereum Merge will force PoW miners to look for greener pastures, such as other PoW blockchains, and therefore “swamp” other coins by increasing mining difficulty and plunging profitability.

    “As GPU miners point their hardware at other chains their difficulty will increase causing lower returns and splitting the reward amongst more miners,” Long stated.

    CEO of White Rock suggested that the migration will likely force many crypto miners to abandon their expensive mining rigs.

    “Hash rate will flow to alternative GPU PoW coins, and many miners will simply give up and try to sell off their farms of cards,” Long said, adding that “some miners will try to sell their High-Performance Computing (HPC) or GPU cloud services and will likely fail since there’s too much capacity chasing a limited amount of demand.”

    With GPU prices and demand declining following the fall of Bitcoin (BTC) prices, some cards are already selling for below the list price, and sellers struggling to sell out their mining rigs and cards for inflated prices.

    However, regardless of the aftermath of the Merge, Long says he is “not strongly opposed” and is interested to see “how market forces play out.”

    “When I was building GPU farms in 2017 the Merge was cited as an imminent threat and would have been much more impactful then,” he noted. “There will always be GPUs mining some GPU optimized chains, but I doubt we will return to the levels of revenue seen in ETH proof-of-work at its peak ever again.”

    Ethereum’s transition to a proof-of-stake (PoS) mechanism is expected between September 13-15, as co-founder of Ethereum Vitalik Buterin said in a tweet on September 6, and it is considered one of the most significant upgrades in the crypto market this year.

    Meanwhile, many cryptocurrencies still continue to use of proof-of-work (PoW) method, including Bitcoin (BTC), Litecoin (LTC), Bitcoin Cash (BCH), Ethereum Classic (ETC), Monero (XMR), Zcash (ZEC), and Ravencoin (RVN).

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