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After Ethereum Upgrade, Where Will Ethereum Miners Go?

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The Ethereum protocol will eventually change, and the miners on the PoW network will face extinction.

"What Will Happen to Ethereum Miners After ETH 2.0?"

原文作者： Jeff Benson

Original text: Moni, Daily Planet

The upcoming proof-of-stake network will weed out Ethereum miners, but that doesn't mean they'll leave.

Like COINS, etheric fang (Ethereum) the "dig" also requires a lot of energy to protect the network security, create and distribute new digital currency at the same time, on a global scale, the etheric fang miners quantity also many, but also need to purchase a valuable mill to solve the problem of computing and make the etheric lane network underlying encryption monetary & have spent The ETH. However, if all goes well, Ethereum will get a major upgrade in 2022 that will fundamentally change the way the network works and the way ETH tokens are created -- in other words, Ethereum mining will be a thing of the past.

So what does the future hold for the miners now working on the Ethereum blockchain?

"Prove"

The Bitcoin White Paper was officially released in 2008 and laid out a new way to use cryptography as a way to send money securely on decentralized networks, a concept we know today: Proof of Work.

The Ethereum blockchain was officially launched in 2015 and, like Bitcoin, uses the same proof-of-work consensus protocol. In a nutshell, proof of work is a way to ensure that computers agree on the state of transactions and databases at any given time, and under this consensus mechanism, the network can be protected from potential double or multiple cost attacks.

While the proof of work is a cryptographic algorithm, the Ethereum Foundation explains that "mining itself is the" work, "i.e. the act of adding valid blocks to the blockchain." Of course, algorithms that use a lot of computing power tend to consume a lot of power, which is a major reason that environmental groups have attacked cryptocurrencies.

To put it frankly, the core Ethereum developers have been working on changing the network consensus protocol from a proof-of-work (PoW) to a proof-of-stake (POS), a new consensus mechanism that uses a very small amount of power to keep the network running while still continuing to support larger transactions. Security in the upgraded Ethereum network, known as Ethereum 2.0 (ETH 2.0), will be maintained by pledging ETH tokens to ensure that attacks can be effectively blocked, as the tokens pledged by the bad actors can be seized once they carry out an attack.

According to core Ethereum developer Tim Beiko, when Ethereum 2.0 is officially launched, the currently allowed proof of work Ethereum blockchain will be "merged" into the new proof of stake blockchain, which could happen before the end of 2021 -- that is, All mining on the Ethereum network should be shut down by the end of the year. Tim Beiko:

"Before the Ethereum network is upgraded to 2.0, miners should prepare ahead of time to make sure they don't lose money."

But the question is, where do today's miners go with Ethereum 2.0?

"Merger"

Michael Carter, a cryptocurrency miner and host of YouTube crypto channel Bitsbetrippin, doesn't expect a major decline in the Ethereum mining market until the Ethereum proof-of-work network and proof-of-stake mining are "merged."

But just in case, Michael Carter has put a lot of effort into estimating profits. They analyzed at least 10 different scenarios to calculate the profitability of Ethereum mining over the next few months, such as high price and high volume, high price and low volume, etc. While Michael Carter is a proponent of native Ethereum, he says he's ready for an Ethereum 2.0 upgrade -- "If the other chain becomes more profitable, I'll switch my mining resources to the new chain."

Of course, Michael Carter is in no hurry to switch networks. For those Ethereum miners with decent cash flows, they can actually play the "long game" right now, holding on to ETH and waiting for the price to rise.

Once the merger between Ethereum 1.0 and Ethereum 2.0 is complete, Michael Carter thinks current Ethereum miners should switch to other blockchains, and there are two easy options now, one is Ethereum Classic and the other is Ravencoin:

* Ethereum Classic is another chain that emerged from the hard fork of the Ethereum network in 2016. As of June 22, Ethereum Classic had a market value of about $4.7 billion.

* Ravencoin, the native asset of the network used to move digital and tangible assets, had a market cap of about $436 million as of June 22 and a token price of around $0.05.

Neither Ravencoin nor Ethereum Classic are as well known as the Ethereum blockchain, nor are they currently widely used in the crypto community. But that's OK, because the most important thing is that both of these digital currency blockchain networks can be mined with computing devices that use graphics processing units (GPUs), just like Ethereum 1.0.

However, in Michael Carter's view, future miners using ASICs may have a tougher time because Ethereum has already used algorithms to take away most of the advantages of ASICs, even though they are more powerful, and once the Ethereum 2.0 upgrade is complete, They can't switch to another network and continue mining like GPU miners.

In the words of one Reddit commenter:

"ASIC mining machines will become useless in the future."

"Warning"

Unlike Michael Carter and other miners who are ready to "jump ship" after the Ethereum 2.0 upgrade, not all Ethereum miners are happy with the current upgrade arrangement.

In July, a major update to the Ethereum network is expected to bring major changes to how miners are paid (and how much they pay). This update will include the Ethereum Improvement Proposal EIP-1559 in the so-called "London" hard fork -- after the deployment of this proposal, the Ethereum blockchain will automatically calculate the amount of gas that users are paying for (Ethereum's network charges), and then... Destroy it.

In other words, instead of being paid to miners, ETH will be sent to an address that no one can access and eventually destroyed to ashes... This means that after the "London" hard fork is completed, Ethereum miners will only be rewarded with newly minted ETH. While proponents of EIP-1559 argue that the upgrade will ultimately benefit everyone on the network (as reduced supply increases demand, which in turn can drive up ETH prices), not all miners are so convinced -- and there are undoubtedly condemnations as well as advocates.

EIP-1559 sets the unofficial "game clock" for Ethereum network integration, as it also represents the point at which miners might start abandoning the network (which would have given up mining in a few months anyway). But if they leave Ethereum now, the miners may miss out on their last chance to make a fortune.

Ethereum core developer Tim Beiko explains:

"If miners leave the network before EIP-1559 is deployed to the Ethereum blockchain, then the overall network will be less computing power and more profit will be made for other miners. In other words, the fewer people who mine, the easier it will be for those who remain to get access to ETH."

Given that Ethereum has to do distributed "mining" to secure the network, there could also be some risk to the blockchain if a large number of miners leave the network.

Tim Beiko continues:

"In the EIP - 1559 before deployment to the etheric fang block chain, is that we need some of the miners, but if they gradually left the network before network upgrades, may bring to the current network security risk. But in fact, most of the miners has been invested in infrastructure, such as mining machine costs, considering the miners have spent a lot of fixed costs, So they should have an incentive to drill down to the last block."

While some miners with outdated mining equipment may "jump ship" as the time for the EIP-1559 to be deployed to the Ethereum blockchain gets closer, there will still be miners on the Ethereum network who will stick around. Will Foxley of Compass Mining says of this phenomenon:

"A lot of people thought that the deployment of EIP-1559 to the Ethereum network would cause miners to leave, but at least before the deployment, there were a lot of miners on the Ethereum blockchain mining because they wanted to get as much ETH as possible before the merger because they knew that once the EIP-1559 was deployed, The ETH price will go up."

Are you ready?

Michael Carter emphasized:

"Everyone knows that Ethereum will move to proof-of-stake consensus algorithms, but only those who are prepared are capable of dealing with this change. Some pools have been preparing for the network changes for years, such as the second largest pool on Ethereum, F2Pool, which has already built the ETH 2.0 verifier pool."

Perhaps coincidentally, some mining pools announced support for EIP-1559 earlier this year, indicating that someone in the market clearly knew that the price of ETH would go up over time once this Ethereum improvement proposal was deployed.

History has shown that any blockchain network needs to side with its core users and contributors, or it will be costly, as it was before. DAO Hard split ends. The good news is that key developers and core contributors have been actively building Ethereum to help it thrive and grow to where it is today.

However, there has been opposition from the Ethereum community to the EIP-1559 proposal, and Sparkpool is one of them. Sparkpool, which currently controls nearly a quarter of Ethereum's computing power, sees the EIP-1559 proposal as "the distribution of wealth and the tyranny of the majority." However, according to Will Foxley of Compass Mining, Sparkpool's opposition to the deployment of the EIP-1559 may not be successful:

"I don't think there's much they can do, and I think they realize that."

In theory, however, there are ways for ETH miners unhappy with the EIP-1559 proposal, such as creating another Ethereum fork, a sort of "Ethereum Classic 2.0", that insists on not moving to a proof-of-stake consensus algorithm.

The Ethereum agreement will eventually change, and the PoW miners will be eliminated. Only time will tell us what the final result will be.