Ethereum may be the second-largest cryptocurrency after Bitcoin and the most popular among GPU miners. However, the network has little time to conclude its activities on the Proof-of-Work (PoW) protocol.
Ethereum is set to move to a Proof-of-Stake (PoS) protocol later in the year once its Merge with the Beacon Chain is completed.
What would then be the outcome for GPU miners? Where will the hashing power move to in all this? With plenty of options available, which among them will be profitable for the hashrate increases?
Assessing the Ethereum Merge
Following the crypto market crash, most GPU miners consider mining Ethereum an unprofitable activity. However, the planned move of Ethereum to PoS means that GPU miners have no use for the Ethereum network.
In addition to the price slump, a spike in energy fees, and a short time frame for the Merge, Ethereum’s hash rate is down. Furthermore, the drop in hashrate makes mining difficult to decline.
In this case, the 10% drop is not enough to cover another aspect of Ethereum’s mining that makes it attractive in the first place. This, the profitability of Ethereum mining is steadily decreasing.
Due to this, miners no longer use their machines because the returns are declining. Meanwhile, the only people able to make something decent from Ethereum mining are those using the latest GPUs and paying less than $0.235kwh.
In other words, a GPU mining rig using AMD Vega64 cards is the most cost-effective GPU during last year’s bull run. But, its energy demand is currently at $0.18kwh to make it profitable for Ethereum mining.
As energy effective as it looks, miners are leaving Ethereum and what they do with their GPUs is best known to them.
Will the Merge be Profitable?
Despite the estimated gains made after the Merge, many still vouch for GPU mining before the Merge. According to a mining firm, Nicehash, moving Ethereum to a PoS consensus does not mean mining will cease to exist.
Many remarkable PoW projects abound for miners to explore, yet not much has been said about the impact of Ethereum’s move to the PoS protocol.
Moreover, GPU miners would have to bid their time and wait until an alternative platform emerges. This is because GPU mining will find it challenging to operate on the day of the Merge.
Additionally, the once-profitable venture would become economically unsustainable at all stages. It is worth noting that miners have been the backbone of the crypto industry since its emergence in 2009.
Decentralized network miners have an unparalleled contribution to the industry; change is necessary, as painful as it sounds. The crypto space keeps evolving, and regulators are asking for changes in the mode of operation due to environmental concerns.
As Ethereum goes about its proposed Merge, other tokens like Ravencoin are bracing up to take the industry by storm. GPU miners will likely move to Ravencoin as an alternative to Ethereum, with high hashing power as the focus.