How Ethereum Merge Will Impact Crypto Miners?


Ethereum (ETH) miners have made higher returns than Bitcoin (BTC) miners in 2022 as the crypto community welcomes the second half of the year. Despite the devastating effects of the crypto winter noted in the space and the rising cost of electricity, miners of both assets have not relented. However, following the Merger, ETH miners could face job losses.

ETH miners revenue is $1B higher than BTC miners this year

By data From Arcane Research, ETH mining has generated $11 billion in revenue this year, slightly more than the $10 billion BTC miners have seen in the same period. This pattern was also noticeable last year, when BTC mining brought in revenue of $17 billion, $1 billion less than the $18 billion generated by ETH miners.

Prior to this, the revenue generated from BTC mining had consistently outperformed that from ETH mining. The turn of events witnessed in the last year and a half can be attributed to the growing interest in ETH as the asset gains more traction due to the versatility of its ecosystem.

However, the long-awaited Link that would cause the Ethereum Mainnet and Beacon Chain to merge, triggering the Ethereum network’s switch to PoS, threatening the jobs of ETH miners who make billions of dollars in revenue annually.

The reality of the ETH miners’ dilemma after the merger

After The Merge, ETH mining will be deprecated and transaction validation on the network will be done by validators who will then be rewarded for their efforts, as is the status quo on a proof-of-stake blockchain.

ETH miners could decide to switch to BTC mining, but that would not be possible, since BTC mining is carried out with ASIC miners while ETH miners use GPUs for their mining processes. The issue of compatibility surfaces.

The second option would be to turn to GPU-minable mining tokens, such as Ethereum Classic (ETC), which is the second largest GPU-minable asset, behind only Ethereum. However, the revenue generated from mining ETC is only a fraction of what miners see with ETH: around 3%.

After The Merge, ETH miners would have the options to receive a fraction of what they used to earn before the merger and sell their GPUs. As The Merge date approaches, mining platform AntPool revealed that it had invested $10 million in ETC, as the ETH-derived asset would still be mineable after the merger.

A Chinese miner, Chandler Guo, recently revealed plans to create a forked version of the Ethereum blockchain (dubbed “ETHPoW”) that would maintain the proof-of-work mechanism after the merger, as a way to keep mining going. . Analysts at BitMex already indicated that investors might show interest in the forked chain.

Abigail .V. is a cryptocurrency writer with over 4 years of writing experience. She focuses on news writing and is adept at finding hot topics. She is a fan of cryptocurrencies and NFTs.

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