On September 15, 2022, the long-awaited Ethereum merger finally took place. After long using a proof-of-work consensus mechanism, the Ethereum blockchain has finally transitioned to proof-of-stake, the same system used by other cryptocurrencies like Cardano, Solana, and Polygon. Thanks to it, the energy consumption of Ethereum has been significantly reduced.
It also claimed another victim: cryptocurrency mining.
But is crypto mining dead as a result of the merger? Or do Ethereum miners have a chance to mine other cryptocurrencies?
What was Ethereum mining and why did it stop?
Prior to the merger, the two major blockchains, Bitcoin and Ethereum, worked on a proof-of-work mechanism. This meant people could mine — lend computing power so the blockchain could verify transactions — in exchange for a reward. Each mined block rewards users with a certain amount of cryptocurrency – thousands of dollars per block (plus transaction fees). To facilitate mining, some miners organized themselves into “pools” where they pooled computing power and shared each block’s reward, with rewards paid out based on each miner’s computing power.
Bitcoin was initially mineable with consumer hardware (CPU), but over time the mining difficulty has increased to the point where specially designed mining hardware like ASICs are required to have an acceptable profit range. Ethereum’s difficulty, however, hasn’t increased much. This, combined with the fact that the price of the cryptocurrency Ether skyrocketed (reaching an all-time high of $4,800 at its peak), meant that Ethereum was an easy-to-mine blockchain, one that offered incredible profits. even to small-scale miners.
For example, with an NVIDIA GeForce RTX 3070, you can mine up to $25 a week or $100 to $125 in a month (depending on your electricity costs!). With a high-end RTX 3090, you could easily make more than double that amount. Once you got back the money you invested, it was basically a stable and effortless income. The Ethereum mining rush was partly to blame for the fact that RTX 3000-series GPUs were non-existent on store shelves when they were released in 2020, with crypto miners immediately grabbing the few GPUs that went retail.
Of course, all (good?) things come to an end. As profitable as Ethereum mining was, the power consumption generated by this practice was enormous, ultimately damaging the environment. And the network itself was volatile, to the point that gas prices could skyrocket and make transactions absurdly expensive. The Ethereum 2.0 merger aims to solve both problems for the greater good, moving things forward towards proof-of-stake. But in the process, it leaves miners without their primary source of income.
Ethereum Mining Alternatives
Common logic would dictate that if Ethereum mining is gone, people can go and mine something else. And even if they can (Ethereum 1.0 miners are scrambling to find an alternative), it’s not that simple.
Let’s look at some alternatives miners are considering.
First, the obvious option: try something else. There are many cryptocurrencies, like Ravencoin, ZCoin and others.
Bitcoin mining is out of the question because it is so difficult to mine that trying to mine with a standard GPU-based rig is pointless, especially if you are a small-scale miner. If you want to see acceptable profit, you will need an ASIC-based platform, which can be expensive. With the price of Bitcoin fluctuating wildly, even if it is profitable at some point, a sharp drop can completely turn the tide.
When it comes to other cryptocurrencies, the difficulty might not be high, but most of them lack a tangible community and therefore they are not that valuable. When you mine something, you do it for a reward, and if that reward is worth next to nothing, there’s no point in doing it. The maximum you can make from Ravencoin with an RTX 3090 is $25 per month, and other cryptos offer even less. Are you actually making money or are you just damaging your hardware and wasting resources to get a few extra bucks in return?
Of course, we also have Ethereum forks. Two particular forks have made headlines since the merger. Ethereum Classic (ETC), the original Ethereum blockchain, predates the merger by a few years and is the continuation of the first iteration of Ethereum. Ethereum 1.0 was actually a fork of ETC and became the most popular option.
Moreover, after the merger, a new fork also appeared, dubbed “Ethereum Proof-of-Work” (ETHW).
ETC and ETHW are potential Ethereum replacements for rolling the dough. And indeed, due to the media attention and miners gathering around each crypto, their price has increased. ETHW was trading at around $5 when The Merge took place, and its price was around $8 at the time of writing, according to CoinMarketCap. Looking at the CoinMarketCap ETC chart, the price of this currency has fallen. Even if they manage to move up, whether they’ll keep the momentum going is another thing. Mining something on its own does not guarantee that its value will increase. It’s a question of supply and demand — there may be a lot of supply, but if there’s no demand, it won’t be worth anything.
According to TheNewsCrypto, one of the organizers of the ETHW fork, Chandler Guo, believes that the ETHW price will eventually catch up with Ethereum over the next decade. He is very optimistic about it, but the outlook is more hazy for us. We should also keep in mind that for many miners, mining was their main source of income. Most crypto miners aren’t in it for the long haul and won’t mine something by blindly believing in a concept or hoping its price will go up in 10 years. They want money now. And at the moment, at the time of writing, neither ETC nor ETHW is profitable for me. You will get, at most, a few cents each day.
Crypto Mining is dead (at least for now)
Unless a shiny new alternative to Ethereum emerges, one that people will actually want to use for purposes other than mining, crypto GPU mining is effectively over. If you have a GPU-based rig, there is hardly any goal at the moment to mine.
You’ll damage your hardware, increase your electricity bill, and all for pennies. It’s not worth it, if you ask us.
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