Miners throw in the towel – On September 15, the network Ethereum finalized its transition from Proof of Work to Proof of Stake. Unfortunately for miners, Ethereum has so far been the most profitable blockchain to mine. In front of the disappearance of mininga majority of miners have made the decision to unplug their machines.
Proof of Stake: the end of mining on Ethereum
As we just discussed, the Ethereum network has finalized its transition from Proof of Work to Proof of Stake. The miners, who until now secured the chain, were then replaced by validators.
As a result, millions of graphics cards involved in Ether mining now find themselves without a blockchain to mine. This represents an estimate of $5 billion of materials that end up unused.
First, the miners massively migrated to other blockchains as an alternative to Ethereum. For example, the network Ethereum Classic experienced a significant increase in hashrate when switching to PoS. In practice, its hashrate has been multiplied by 4 going from 77 to more than 300 TH/s. Unfortunately, this situation will only have been short duration. Indeed, the hashrate has since been divided by 2and the network is currently recording 153 TH/s.
The hashrate ofEthereumPow (ETHW) experienced the same fate. Indeed, it skyrocketed at the time of the launch of the blockchain, to 79 TH/s, before falling back to around 40 TH/s.
At the same time, other cryptocurrencies, such as Ravencoin or Flow (secured by Proof of Work), have also experienced this hashrate surge, though without registering such a drastic drop in recent weeks. Indeed, the hashrate of Ravencoin has been multiplied by 3 and that of Flux by 2.
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Miners disconnect for lack of profitability
Obviously, the massive migration of miners to these alternatives to Ethereum has not only had positive aspects. Indeed, who says more miners says decline in profitability.
As a result, many miners found themselves at undermine cryptocurrencies at a loss. Unsurprisingly, a large majority of these miners decided to unplug their machines rather than continue like this.
According to the estimates of 2Miners reported by our colleagues from The Defiant, 8 out of 10 minors decided to unplug their machines after The Merge. Indeed, although some of the power was found on competing chains, the overwhelming majority of the 900 TH/s of the Ethereum network disappeared from circulation.
However, this situation could good to be only passenger. In fact, the market for cryptocurrencies is not in Olympic form. As a result, mining revenues are logically lower than those generated in full bullrun. But that doesn’t mean that miners won’t reconnect their machines when the market picks up. If they are still present for the next cycle.
As the saying goes, the misfortune of some is the happiness of others. As miners unplug their machines, gamers, they rub their hands. Indeed, faced with the decline in demand from miners, graphics cards have seen their prices drop by 40% over the past three months.
All miners will no longer be present in the next bullish cycle. Prepare now by registering on AscendEX. Go register! (commercial link).