What will happen to crypto mining when ETH 2.0 becomes a reality? 

What will happen to crypto mining when ETH 2.0 becomes a reality? 

February 23, 2022 0 By Maxim Hayden

Since mining Bitcoin (BTC) with GPUs became unprofitable, Ethereum (ETH) has remained a staple for miners since as early as 2015. In recent years it has remained the most profitable coin to mine for most GPUs that have over 4GB of RAM, whether it be an Nvidia or AMD graphics card. 

However, the Ethereum 2.0 Proof of Stake (PoS) update has been creeping up on miners with each passing year. This update will see mining the coin become obsolete, and miners having to point their rigs to another network. Networks such as Raven Coin (RVC), Ethereum Classic (ETC), Zilliqa (ZIL), or Ergo (ERG), are some of the better-known mine-able coins outside of ETH, that miners will look to. However, whether these other coins will be able to take the sheer hash/processing power currently running the Ethereum (ETH) network, and still be profitable, is another question entirely. 

To put this into perspective, the ETH network currently sees an overall hash rate of around 1 PH/s (Peta-hash). Although tiny compared to the hash rate of around 90 EH/s (Exa-hash) that the ASIC miners send to BTC, in comparison to other coins that are mine-able by GPU, this is huge. Ethereum Classic (ETC) sees a hash rate of a little over 21 TH/s (Tera-hash), and Raven Coin (RVN) sees a hash rate of just under 5 TH/s. 

So, if for instance this hash rate all moved over to these other coins, that currently have a much smaller hash rate, it would send the difficulty through the ceiling, and in contrast the profits will plummet to the floor. This means that miners of these coins would be mining at a loss, unless the price of these other coins skyrocket. 

However, something that does need to be taken into consideration on this, is the sheer volume of ASIC miners that currently make up that 1 PH/s total on the Ethereum network. Although ASIC miners can produce huge volumes of power to a network, they’re a one trick pony, and once the PoS update happens these will be virtually worthless, and can’t simply be re-directed to another network like a GPU. 

Although nobody is sure of the exact hash rate that ASIC miners make up, and there’s no way of verifying this. It is thought that this could make anything, up to 80%, of the network wide traffic. If ASIC miners do make up this volume of the pie, or even close, this will see a huge proportion of this hash rate not re-directed to another coin, as and when the change does happen. 

Although the existing alt coins outside of ETH will struggle to take on this migrated hash rate, it’s unlikely to be anywhere near the numbers that people believe. At this time, it needs to be reiterated that there is still no concrete release date for ETH 2.0, and the expected Summer 2022 launch could end up being Winter 2022, or even later. Also, more importantly, as and when ETH 2.0 does finally launch, there will still be coins that are mineable, even on a speculative basis to start with. But make no mistake, proof of work as a concept, in terms of GPU mining, isn’t going anywhere. 

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