Is the transition from Proof of Work (#PoW) to Proof of Stake (#PoS) on the home straight or are the set goals still a long way off?
Years of preparation and various setbacks are already behind #Ethereum 2.0, but what does this mean for the next scheduled #merge date? Are we finally in the last phase and the transition will now take place in #September2022? What does this mean for all the #GPUMiners and #AsicMiners mining Ethereum? Is this the end or does the hardware have another profitable coin that is worth mining? You will find out all this in the following lines.
Announced merge – ETH 2.0 for June 2022
The announced June 2022 merge has been postponed to July and then to August 2022. Other sources of error had to be eliminated so that a smooth merge could be brought to fruition. In our opinion, the earliest the merge will be is September 2022.
Switching from Proof of Work to Proof of Stake is no easy feat. This alone shows the changeover time of more than seven years. The switch to PoS has been planned since day 1 of Ethereum. As is well known, this was delayed due to technical challenges.
However, Ethereum would like to carry out the conversion promptly in order to reduce the high power consumption. With the switch to Proof of Stake, Ethereum will only be secured in the form of investors in the future. The deposits made – the stake – represent a type of loan. This can be paid out after a blocking period with a certain return. If you are looking for a fixed, lower return, this is the right place for you.
The network continues like this, superficially nothing changes, since the transactions of the blockchain run via validators.
The goal is to reduce the ecological footprint of the network by 99.95 percent by switching to Proof of Stake. Those who focus on sustainability must promote sustainable growth.
What does the transition mean for all miners?
A switch from Ethereum from PoW to PoS means that all GPU and Asic miner owners will no longer be able to mine Ethereum (ETH). GPU hardware owners are able to mine another coin with one click, e.g. Ethereum Classic (ETC), Kawpow, Autolykos2, Bitcoin Gold or Ravencoin. Asic miners such as the Yamitech (YM-100) or the Antminer E9 can mine Ethereum Classic (ETC) after an update.
According to the current calculation basis, approx. 10 – 30 percent less is generated depending on the hash performance. However, if every hardware owner switches to ETC, experts assume that the losses in income will only be around – 5%. However, no one can guarantee this and it is pure speculation.
Basically, Ethereum is shifting its mining to Ethereum Classic. The assumption is very reasonable that the ecological balance for Ethereum will decrease by 99.95% as a result of the PoS, but will increase massively for Ethereum Classic. The demand for mining on ETC and the course development will increase massively. It’s anything but boring. Despite switching to ETC, mining is still extremely profitable, with monthly returns of around 5-8%.
How is Ethereum price changing?
With around 90% less new ETH coming into circulation – i.e. the daily 12000 ETH drop to 1280 ETH – there is less supply. Before that, millions of ETH miners received their mining proceeds every day or every hour – which is also a transaction. Furthermore, the miners had to cover their energy costs, so part of the ETHs generated was sold and there were an extremely large number of transactions.
Transaction fees will go to stakers instead of miners after the switch. Transactions will be significantly lower as staking has a lockup period. It is currently speculated at around 5% per year. It is speculated that the demand to stake ETH, i.e. the demand for ETH is increasing.
Basically, the higher demand and lower supply indicates that the price will rise massively.
The ETH 2.0 merge is coming, it’s just a matter of months, not years. Miners have to prepare mentally for a change, because whether September 2022 or later, the merge will follow.
Whether monthly returns from mining ETC will be as strong as ETH remains to be seen.
Despite the change, the future looks positive and we are excited!