How Ethereum miners defy the merge

Ethereum’s mining days are numbered – the consensus shift to Proof of Stake is on the home stretch. The effects of the merge can already be seen, alternative blockchains are recording abrupt increases in computing power. Some “big players” also seem to be switching to alternative cryptocurrencies.

Ethereum Classic – back to basics

A trend that has recently been observed in some networks: rapid increases in hashrate. At least for the cryptocurrencies, which, like Ethereum, have so far also been “mined” with GPUs, i.e. graphics cards. Since Ethereum is ceasing mining operations with the switch to Proof of Stake, miners seem to be reorienting themselves towards lucrative alternatives.

This development is particularly noticeable with Ethereum Classic. Since July, the hashrate has increased by 138 percent from 18 to 43 TH/s.

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Ethereum Classic hash rate | Source: Coinwarz

Miners reinvent themselves

The merge asks miners: how to continue? As an alternative, the mining of other cryptocurrencies still yields some income – but this is significantly lower than with Ethereum. After all, an industry giant like Hive Blockchain uses this strategy from the merger. The publicly traded miner announced in a press release this week that it had “already started analyzing the mining of other GPU-minable coins.”

Another chooses Hut 8 Mining. The company, which is also listed on the stock exchange, stated that it would make the computing power available in other areas. The machines could be “switched as needed,” Hut 8 said, “to provide artificial intelligence, machine learning or VFX rendering services to clients.” The concept: high-performance computers on demand.

Three alternatives

The Ethereum merge leaves a hole – especially in the income of the miners, for whom the consensus change is initially a financial setback. The losses cannot be plugged with alternative cryptocurrencies either. Ethereum accounts for 97 percent of daily mining revenue.

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The more profitable scenario would be to sell the hardware and participate in staking with the proceeds, as “Butta”, CMO at Bitfly, which operates the largest ether mining pool, Ethermine, told BTC-ECHO. This development has also set in over the last few months, which can be seen in the fall in prices for used graphics cards.

So there are three options for miners: dig for other coins, sell graphics cards and stake for them or – like Hut 8 Mining – make computing power available for other services. Which miners also choose: the merge is shaking up the crypto ecosystem.

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