It seems that the much-anticipated nirvana for gamers, one that is filled to the brim with affordable GPUs, will have to wait a little while longer – and might never arrive even – as a group of Ethereum miners remain determined to preserve their computationally intensive method of authenticating transactions on the now soon-to-be-defunct blockchain.
As a refresher, in a matter of hours, Ethereum is all set to transition from a Proof-of-Work (PoW) transaction authentication mechanism, where miners expend computational power to win the right to authenticate incoming transactions, to one based on a Proof-of-Stake (PoS) framework, where validators lock up a specific amount of Ethereum in dedicated nodes in order to compete with each other to authenticate transactions and introduce new blocks into the chain. The transition will not only reduce Ethereum’s energy footprint by around 99 percent but also pave the way for the world’s second-largest cryptocurrency to potentially become deflationary owing to a dramatic reduction in the coin’s issuance.
However, a hardcore group of Ethereum miners is adamantly refusing to march to this PoS-based future. Instead, as soon as the merge goes live, these miners have expressed their intention to copy the entire state of the Ethereum blockchain – including all tokens, NFTs, DApps, and liquidity pools – to their PoW-based hard fork, unimaginatively dubbed the EthereumPoW (ETHW). Essentially, the legacy blockchain’s liquidity pools will be drained and then converted to ETHW coins. However, with hardly any DApp operator or stablecoin backing ETHW, it is difficult to gauge the value proposition for this fork, especially as Ethereum Classic (ETC) already offers an established venue for these miners.
Surprisingly, EthereumPoW has managed to win a few powerful backers, including the founder of TRON, Justin Sun, as well as crypto exchanges such as Poloniex and BitMEX.
Bear in mind that, unlike Ethereum, ETHW does not yet exist. Instead, the coin is currently trading as an IOU and would be swapped with the actual ETHW once the hard fork goes live post-merge.
Even if EthereumPoW manages to hard fork successfully, it would still have to contend with Ethereum’s built-in difficulty bomb that progressively makes mining new coins on the blockchain more difficult.
So, the question arises: why are Ethereum miners going to such lengths? Well, as per an estimate by Bitpro Consulting, Ethereum miners have deployed around $15 billion in capital toward GPUs. It is, therefore, understandable that some miners are salty at the prospect of losing their gig. Then again, why not simply switch to Ethereum Classic, which does not have the built-in mining difficulty bomb?
Source: https://coinmarketcap.com/currencies/ethereum-pow/
At the time of writing, ETHW is trading at around $34, up around 20 percent over the past 24 hours. For comparison, Ethereum is currently trading at $1,618, up just around 2 percent.
Looks like there will be a torrential flood of $NVDA GPUs for sale starting tomorrow at 1:00am https://t.co/3ePScTQT31
— Julian Klymochko.eth (@JulianKlymochko) September 14, 2022
Meanwhile, we would advise our readers to temper their expectations regarding an imminent drop in GPU prices. While Ethereum’s hashrate has not plunged significantly in recent weeks, potentially leading to a flood of GPUs hitting the market once the merge goes live, ETHW and Ethereum Classic do provide opportunities for legacy miners to maintain their gigs. It is for this reason that we believe the crypto world is heading for an epic clash in the next few hours, one that would determine the fate of the mining equipment worth billions of dollars.
As for the gaming community, I think everyone knows which side it would be rooting for. Let the games begin, and, as so eloquently stated in the Hunger Games movie, may the odds ever be in your favor.
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