Major digital currencies have come under scrutiny in recent years for being particularly power-hungry. Currently, in widespread usage, the proof-of-work system safeguards transactions by having users execute progressively more complex cryptographic calculations.
However, the networks provide monetary or token rewards to their users once they have completed specific tasks. The term “crypto mining” describes this practice.
One of the most prominent blockchains, Ethereum, is finally stopping it. The two-part process, dubbed “The Merge,” which involved the method’s revision, has recently been finalized.
In its place, proof-of-stake has replaced proof-of-work. To allocate rewards, the network utilizes a weighted random approach to choose who will build the next block in the chain.
This decision is dependent on a number of variables, including the availability of resources and the length of the commitment.
We May Expect a Significant Drop in Energy Usage
It is expected that The Merge would resolve various problems. For instance, this feature will make it harder for any entity to gather enough resources to assume complete network control.
It also reduces energy consumption when using platforms such as Bitsgap because neither central nor graphics processing units are used for mining. Ethereum’s value is predicted to drop by more than 99.99% if The Merge goes forward as planned.
To that end, this seems like a positive development. We may infer that many miners did not want to transfer to another blockchain prematurely and kept with Ethereum until the last proof-of-work blocks since the Ethereum network’s hash rate stayed abnormally high up to the time of the switchover.
After that point, everything altered. Bitfarms’ head of mining operations, Ben Gagnon, claims that The Merge effectively stopped GPU mining.
Ethereum mining used to be profitable, at least in comparison to the relatively inexpensive cost of electricity in the United States, but this is no longer the case.
For 6 cents per kilowatt hour, someone mining with an Nvidia RTX 3090 is definitely losing money. Less than twenty-four hours after The Merge, GPU mining is no longer profitable, according to Gagnon.
With Ethereum Classic, a hard fork of Ethereum whose blockchain still uses proof-of-work, you’re now losing 7 cents daily. If you utilized Monero, the cost would be significantly lower, saving you 37 cents.
There is still a 2-cent profit to be made with Ravencoin, even though it is less significant. Today, GPU mining is profitable only for currencies with a low market volume and a highly liquid network.
Nobody in the BTC Community Has Shown Any Inclination to Switch Over
It has also been suggested that the Bitcoin network, whose mining has traditionally required specialized devices rather than individual, commercially accessible graphics cards, may be on the move.
Neither the current members of the network nor its creators show any enthusiasm for this change. We’ll have to wait and watch whether things shift in the future.
A famous blockchain specialist claims that Bitcoin is the only “enfant terrible” regarding the amount of energy it uses and the pollution it causes.
He is confident that an increase in energy efficiency is crucial but that its failure is attributable to people rather than machinery. According to him, the blockchain’s dependability—crucial for financiers—is guaranteed by its efficient energy use.
Many miners’ businesses are based on the proof-of-work algorithm that underpins the world’s largest blockchain. Due to Ethereum’s change, which has made the platform more appealing to corporations, pressure should be applied in this direction, even though it is now unavailable.
When it comes to Ethereum, the expert claims that the “merge” is over. The blockchain itself is functional, but whether or not all of the myriad apps that rely on it are unknown.
There Has Been a Major Slump in the Ethereum Price
Ethereum, on the other hand, saw its value drop due to the adjustment. After the first two phases were completed, its value plummeted by more than 16%, from roughly $1,700 to $1,430 at the time of writing.
It should be noted that throughout that same period, the price of Bitcoin dropped by roughly 11%. That’s why it’s so hard to say whether or not The Merge will cause a long-lasting decline in trust.
Experts predict that proof-of-work blockchains like Ethereum and proof-of-stake blockchains like NEO will face regulatory hurdles.
At least in the United States, where the SEC has intimated that Ethereum may now be regulated as a security because of its staking mechanism.
However, Bitcoin and its ilk are exempt from the proposed limitations or bans on proof-of-work being considered by the United States government.