Mining Pools or Miners Who Can Live To The Last In Ethereum “Merging”?

on July 14 that  more and more people have joined the mining ranks in the past few years, and many miners have been rewarded with virtual currency by providing computing power to the encrypted network. Of course, Ethereum, the world’s second largest cryptocurrency network, is not without the participation of a large number of miners, who compete to provide computing power in exchange for ETH as a mining reward. However, a sea change is coming to the Ethereum mining market, and thousands of other miners may soon end their mining careers as Ethereum is about to receive its biggest update since its inception — ‎‎” The Merge.

The Ethereum “merger” (previously known as Ethereum 2.0) refers to the mainnet being merged with the beacon chain responsible for the proof-of-stake system, and the consensus mechanism fully transitioning from proof-of-work (PoW) to proof-of-stake (PoS), and since then In the future, “Ethereum mining” will cease to exist. For various reasons, the Ethereum “merger” has been delayed many times, but the update should be completed before the end of this year, if nothing else. ‎

‎As the “merger” date looms, most miners can’t avoid the dire question: Where are they going to mine Ethereum for a living? ‎

‎Mining pools or miners, who can survive to the end

‎‎According to the Ethereum Foundation, Proof of Stake (PoS) will reduce the energy usage of the entire Ethereum network by 99%, while also reducing the generation of new ETH and reward distribution in smaller blocks, It’s an environmental measure. ‎However, for mining pool miners and other independent Ethereum miners, this update of Ethereum has a profound impact on them. Because for now, Ethereum miners acquire new ETH by providing a lot of computing power (called ‎‎Proof of Work‎‎), and after the “merger”, these networks, called “validators,” participate Miners need to stake a lot of ETH to get rewards (called Proof of Stake), which makes the mining hardware they originally spent a lot of money to buy useless in Proof of Stake. ‎

After Ethereum transitions to proof-of-stake, participants need to stake at least 32 ETH to have a chance to receive rewards. In order to obtain higher returns, “validators” should try to pledge more ETH than this. So, this condition alone has shut out many people, not to mention the need to create and maintain their own staking pool, which will be much more complicated than maintaining a bunch of mining machines. After all, the era of earning money just by purchasing equipment is about to end. If you want to continue to benefit, you must make timely changes.

‎For mining pools, on the other hand, this “merger” has almost no impact on them. This is due to the fact that mining pool companies never actually provide computing power themselves, all they do is coordinate pool members, find new users, and provide the infrastructure to keep customers happy. As a result, they never invested in mining equipment, and therefore do not have to incur losses for equipment decommissioning. It is for this reason that some of the industry’s leading Ethereum mining pools have begun transitioning to staking pools, coordinating and pooling the ETH of a large number of individual “stakers” in order to obtain more ETH rewards. ‎

l ‎The world’s second largest mining pool F2pool and its sister company Stakefish have long been preparing for Ethereum’s transition to proof-of-stake, sharing and deploying human resources.

l EtherMine, the world’s largest Ethereum mining pool, is also transitioning to proof-of-stake: the company has just launched a staking pool service, the EtherMine Staking beta. ‎

It is worth mentioning that although the combined computing power of the two major mining pools Ethermine and F2pool accounts for nearly half of all the computing power of Ethereum mining at present, due to the business model adopted by these companies Individuals charge mining fees and do not participate in mining themselves, so they are not affected by Ethereum’s shift from proof-of-work to proof-of-stake. ‎

‎Is there a 

‎If some independent miners are incapable or unwilling to create their own staking pool business, do they have other options?

Of course, they can sell their mining rigs and join the staking pools of big companies; they can also keep their hardware rigs (must be more general GPU mining rigs ‎‎‎, not ASIC miners)‎ to mint Other types of cryptocurrencies. ‎

‎But obviously, neither of the above options is the most ideal. ‎First, staking a small amount of ETH in a large staking pool earns a much lower rate of return than mining; second, since the demand for other cryptocurrencies (such as Ethereum Classic, Ravencoin, and Ergo) is much lower than that of ETH, miners use the current The profit margin for mining with equipment is also much lower. ‎As a result, miners cannot recover the high cost of purchasing mining equipment.

‎Do miners 

‎As mining pools gradually transition to proof-of-stake, industry insiders have noticed that the composition of new staking pool participants and the composition of miners are completely different, which is exactly what Ethereum expects. Because for those who have purchased mining equipment, using their hardware facilities to participate in “validation” is completely overkill; for those who have not purchased mining equipment, the cost is much less, due to The “verification” process requires no specialized equipment and can be done only on a home computer. ‎

‎When it comes to the miner transition, Butta, CMO of EtherMine parent company Bitfly, is optimistic, saying that the company’s goal is to help miners on the current platform move from proof-of-work to proof-of-stake. Butta pointed out that most of the staking on EtherMine’s new staking platform currently comes from existing miners, so they have the confidence to lead the miners forward. ‎

‎The wheels of the times are rolling forward, and the long-awaited “merger” of Ethereum will finally come. Frankly, ethereum miners don’t have too many options, all they can do at the moment is keep mining until a “merger” comes. Ultimately, no matter what choice Ethereum miners make (whether to keep mining or switch to staking), it will no longer be easy to continue earning on Ethereum. So as to whether to go left or right on this fork, I believe every Ethereum miner already has the answer in mind.

Posted by:CoinYuppie,Reprinted with attribution to:
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