As we near the Ethereum merger, opinions from the crypto community have been louder than usual. The long-awaited ETH 2.0 will transform the blockchain’s consensus mechanism into a proof-of-stake model and put ETH miners out of business. Aside from the chances that they will exit the mining industry, there is a possibility that they will decide to hard fork the Ethereum network or try to switch to another blockchain as well.
What’s happening?
Recently, Hongcai “Chandler” Guo, a former ETH miner, mentioned in an interview that several Chinese makers of Ethereum mining machines have approached him to initiate forking efforts. According to journalist Colin Wu, there are nearly $5 billion worth of graphics card mining machines and ASIC Ethereum mining machines (A11 E9) that need to find a way to continue mining after the merger.
There are currently almost $5 billion in graphics card mining machines and ASIC Ethereum mining machines (A11 E9) that need to find a way to continue mining after Ethereum becomes POS in September. Most are owned by Chinese miners.
— Wu Blockchain (@WuBlockchain) July 29, 2022
Although moving ETH to a PoS mechanism will significantly reduce power consumption, miners are concerned about how they will keep their operations running. For some, a hard fork that would allow them to continue mining the crypto is a good idea.
While there is a lot of hype surrounding Ethereum 2.0 in the crypto community, opinions differ as always. In fact, MakerDAO hinted in a recent Twitter thread that the merger could do more harm than good.
Implications for Makers:
• Minimal impact if all externally supported asset issuers support merge upgrades.
• If one or more issuers back the PoW fork, it could have a significant impact on DEX liquidity pools and other protocols that accept the asset as collateral.
21/
— Maker (@MakerDAO) August 5, 2022
The miner’s dilemma
Ethereum miners have faced a variety of challenges over the past few months to generate profits from ETH mining. The profitability of ETH miners has been severely impacted by the collapse of the cryptocurrency market as well as rising electricity prices around the world.
According to Bitinfocharts statistics, in July 2022 mining was less profitable than in 2021 when it was only 0.025 USD/day for 1 MHash/s.
Source: BitInfoCharts
Therefore, going for a hard fork doesn’t seem like a viable option for miners as they would still struggle to make profits. Another indication of the minimal possibility of a hard fork is the decrease in the overall hashrate of the Ethereum network, as this indicates an outflow of miners from the network.
Source: 2miners
bottom line
While the hashrate of the ETH network was declining, a massive influx of new miners was seen on the Ethereum Classic blockchain. Given the performance of Ethereum Classic over the past month, it could be a viable replacement for ETH for miners.
Since ETC operates on a PoW consensus mechanism, a new hard fork on the Ethereum network seems illogical. Given the existence of more profitable alternatives to Ethereum, there is little chance of another hard fork.
Source: 2miners
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