According to Andy Long, the Ethereum Merge may force PoW miners to shift to other blockchain projects due to increased mining difficulty.
The changeover of the Ethereum blockchain will significantly impact idle ETH miners in the cryptocurrency market. Once the Merge gets completed, the miners will not have to validate transactions. Andy Long, CEO of mining company White Rock, opined that the PoS network of Ethereum will force PoW miners to switch to other blockchain projects. The Ethereum Merge is a much-awaited event in the crypto space. The Merge will revolutionize the crypto industry and bring a whole new dynamic to the crypto community. The Ethereum is now officially scheduled between the 13th to 15th of September, as confirmed by the Ethereum team. Investors are looking for the developments surrounding the transition from a PoW fork to a PoS (proof of stake) system.
Mining Difficulty For Ethereum PoW Miners
According to Andy Long, CEO of Bitcoin mining company White Rock, the post-merge version of Ethereum, i.e., PoS mechanism, will significantly force pre-merge PoW miners to shift to other PoW blockchains, and thus it will swamp other coins. After the Merge, PoW miners will experience an increase in mining difficulty, which will eventually reduce their profitability.
Elaborating on the mining difficulty, Andy stated, “As GPU miners point their hardware at other chains their difficulty will increase causing lower returns and splitting the reward amongst more miners.”
Andy Long believes that most PoW miners will sell their costly mining rigs and give up mining due to this difficulty and profitability issue after the Ethereum Merge. Moreover, Andy is interested in the crypto market’s reaction after the Merge.
The CEO said, “As GPU miners point their hardware at other chains their difficulty will increase causing lower returns and splitting the reward amongst more miners. Hash rate will flow to alternative GPU PoW coins, and many miners will simply give up and try to sell off their farms of cards. Some miners will try to sell their High-Performance Computing (HPC) or GPU cloud services and will likely fail since there’s too much capacity chasing a limited amount of demand.”
Miners To Shift To Other Coins After The Merge
Andy pointed out that current PoW miners may move to Ethereum Classic (ETC). The additional miners will eventually lead to an increase in mining difficulty. However, it will also boost the hash rate, thereby shielding the project. According to data, ETC has a risk of 51% of being attacked. With the additional miners, this risk can be regulated, and this applies to other blockchain projects as well.
Discussing the threat of the Merge, Andy said, “When I was building GPU farms in 2017 the Merge was cited as an imminent threat and would have been much more impactful then. There will always be GPUs mining some GPU optimized chains, but I doubt we will return to the levels of revenue seen in ETH proof-of-work at its peak ever again.”
However, there are still many cryptocurrencies in the market for PoW miners to continue their PoW path, including Bitcoin, Litecoin (LTC) and Bitcoin Cash (BCH), Zcash (ZEC), Ethereum Classic (ETC), Ravencoin (RVN), and Monero (XMR).
There is no doubt that the Merge will significantly reduce the profitability of miners. Nevertheless, it is expected that miners will find a new way to continue their mining rather than give up. The Ethereum Merge’s hype has also positively pushed Ethereum as ETH is trading near $1,700, up by 6.17% from yesterday’s price.
