01 Aug 2022
Ethereum miners are not looking forward to the merge
Ethereum’s upcoming move to proof-of-stake will render Ethereum miners obsolete. Will the miners accept the defeat or fight back?
Ethereum mining is bigger than bitcoin mining based on revenue. Ethereum miners earned $18 billion in 2021, compared to $17 billion for bitcoin miners.Soon, the merge will replace miners by staking validators, meaning that the Ethereum mining revenue will suddenly drop from billions of dollars annually to zero.Ethereum miners use GPUs, which are different from the ASICs bitcoin miners use. They can, therefore, not direct their machines to mining bitcoin instead. Several mineable GPU coins exist, but most are very small, as Ethereum currently provides around 95% of the total GPU mining revenue.The second-biggest GPU mineable coin is Ethereum Classic. Its mining income is currently only 3% that of Ethereum, meaning that at current price levels, it has not enough room to house the ousted Ethereum miners, although it has surged by 155% in the last month.With around $15 billion invested in GPU mining machines, Ethereum miners are incentivized to attempt to push up the price of Ethereum Classic and other GPU mineable coins. Last week, one of the biggest mining pools donated $10 million to support the Ethereum Classic ecosystem. Some prominent miners are also talking about forking Ethereum to a proof-of-work version.If the Ethereum miners are not successful in their attempts to move to other GPU mineable coins, their only option left is to dump their GPUs on the market, which could lead GPU prices to plummet.