The end of proof-of-work (PoW) consensus on the Ethereum network is likely to flood the crypto industry with decommissioned ETH miners, which will severely disrupt all PoW-based tokens.
Speaking to Cointelegraph, Andy Long, CEO of bitcoin miner White Rock, believes that Ethereum’s upcoming Merge upgrade will force PoW miners to look for greener pastures, such as other PoW blockchains, and thus “crowd” cryptocurrencies others – increasing mining difficulty and reducing profitability, say. :
“As GPU miners point their hardware to other blockchains, their difficulty will increase, resulting in lower returns and the reward being shared among more miners.”
Long added that the migration will likely force many cryptocurrency miners to quit and abandon their expensive mining rigs.
“The hashrate will flow to other GPU PoW tokens, and many miners will quit and try to sell their gear,” he said.
“Some miners will try to sell their high-performance computing (HPC) or GPU services, but will likely fail because there is too much capacity for limited demand,” he said.
Prices and demand for GPUs have already fallen due to falling bitcoin (BTC) prices, leaving some cards selling below list price as vendors struggle to get rid of their rigs and cards mining at exorbitant prices.
Regardless of what happens after the Merger, Long says he’s “not strongly against it” and is interested in “seeing how market forces play out.”
“When I was building GPU farms in 2017, Merge was cited as an imminent threat and would have been much more impactful back then.”
“GPUs will always mine some GPU-optimized blockchains, but I doubt we’ll ever return to the revenue levels seen in ETH’s proof-of-work at its peak.”
Ethereum is expected to switch to a proof-of-concept (PoS) mechanism between September 10 and September 20, which is expected to be one of the biggest upgrades in the cryptocurrency market this year.
Also read: Ethermine, the largest Ether mining pool, launches a new ETH staking service
However, many cryptocurrencies are still set to continue their path to PoW, including bitcoin (BTC), Litecoin (LTC), and Bitcoin Cash (BCH), as well as Ethereum Classic (ETC), Monero (XMR), Zcash (ZEC). and Ravencoin (RVN).
White Rock Management is a Swiss-based digital asset technology company that mines cryptocurrencies through data centers located in Texas and Sweden.
