Ethereum mining no longer exists. Where did the miners go?

It has been defined as “cryptowinter”: a strong general decline in the crypto sector, characterized by a reduction in the value of cryptocurrencies such as bitcoin and ether and also in the volume of collateral projects, such as Non Fungible Token (or NFT), linked to more blockchains. widespread.

The expression of “cryptowinter” is also apt because it allows us to understand the current positioning of Ethereum miners after the recent update made mining useless: many miners are in hibernation, waiting for the winter to pass – and above all that the cost of electricity is lowered.

The frenzy around NFTs seems to have passed. In September the lowest volume of the last 15 months

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What happened after the Ethereum update

The Ethereum update, known as the “merge”, involved an important change to the protocol: Ethereum went from Proof of Work, which required to solve cryptographic calculations for the creation of new blocks, to Proof of Stake, which instead it only requires you to block a share (stake, in fact) of ether in order to be randomly chosen by a pool of validators to undermine the next block in which to insert the validated transactions.

Practically, the update made mining useless: at any moment – although it had been foreseen for years – the many graphics cards purchased were no longer needed.

This does not mean that the miners have sold all the graphics cards, although their market value – primarily that of high-end Nvidia GeForce cards such as the RTX 3080 and RTX 3090 – has dropped, according to the South China Morning. Post, in line with lower demand, at least from the side of miners (and not gamers).

Meanwhile, a new Ethereum chain was born – a so-called “fork”, that is a bifurcation, a network that has separated from the original one – which still relies on the Proof of Work protocol: and is called, in fact, Ethereum Proof of Work (or ETHW).

In fact, today there are three Ethereum chains: the original one (Ethereum Classic or ETHC), still based on the Proof of Work; Ethereum (ETH), the most popular one and in turn born from a fork; and Ethereum Proof of Work (ETHW).

Some of the miners “abandoned” by Ethereum have returned to mine Ethereum Classic; others gave birth to Ethereum Proof of Work; other miners have moved to other Proof of Work-based cryptocurrencies such as Firo, Ergo, Callisto or Ravencoin.

As a demonstration of this movement, after September 15 the peak of the hashrate is evident – the measure of the computing capacity used by the miners of a network, in short – detected above all on Ethereum Classic which has passed from about 80 TH / s to over 300 TH / s and then stabilize below 200 TH / s.

Today a hashrate of about 158 ​​TH / s is detected; Ethereum Proof of Work stops at 53 TH / s; Ergo at 22 TH / s; Ravencoin at 15 TH / s; Callisto at 500 GH / s (after the Ethereum Merge it reached a peak above 11 TH / s); and Firo at 265 GH / s.

Nonetheless, the overall hashrate of these networks did not come close to that which characterized Ethereum before the Merge, well above 860 TH / s; on the other hand, none of these cryptocurrencies is in the least close to the values ​​of an ether and the increase in the hash rate, on the contrary, has reduced the profitability of these cryptocurrencies.

In other words, at least as far as mining is concerned, no cryptocurrency has managed to represent a safe haven to replace Ethereum.

The situation in Italy

The choice of many miners, however, was not linked to the cryptocurrency towards which to redirect the computing capacity of the graphics cards; rather, from the current cost of electricityespecially in Italy.

We are preparing for a time when it will become economic to undermine. In the meantime, let’s look at other projects, partly that already existed and partly new”, A former Ethereum miner who has been active since 2016 explains to

An ideal price, he says, would be around 20 euro cents per kilowatt hour, which would allow to at least equalize the costs of mining although it depends on the cryptocurrency. “If I have to lose money by mining, I might as well buy cryptocurrencies directly on an exchange”, He points out. The rise in electricity prices “it makes it in fact possible to mine not only in Italy, but in most of Europe“.

Resale of graphics cards is one solution. “Those who mine cryptocurrencies keep their graphics cards very well: no one overclocks their memories”Explains the former Ethereum miner. “The card must always be clean and efficient because even a small variation in temperatures is enough to put it at risk. Once reset to factory data, the average user has no way of knowing if the card is worn or not because the performance is identical”To those of a graphics card that has not been used for mining.

Ethereum Proof of Work “at the moment it is a bet, it is not a security like Ethereum“. The value of a cryptocurrency largely depends on the amount of applications that are supported: also for this reason the current value of Ethereum PoW is not comparable to that of Ethereum. This also explains why after Binance announced that its mining pool will support ETHW the value has slightly increased. At the time of writing, however, an ETH is worth around $ 1,300, while an ETHW travels around $ 12: less than a cent of ETH.

After the Merge, finding another project to mine is difficult“agrees another former Ethereum miner.”For now it is better to turn off the machines and see what happens“.

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About Eric Wilson

The variety offered by video games never ceases to amaze him. He loves OutRun's drifting as well as the contemplative walks of Dear Esther. Immersing himself in other worlds is an incomparable feeling for him: he understood it by playing for the first time in Shenmue.

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