Ethereum’s transition from a proof-of-work-based consensus mechanism to a proof-of-stake mechanism is getting closer. This change is being made to reduce the energy consumption and carbon footprint of traditional PoW mechanisms.
The much-anticipated upgrade to the Ethereum network has sparked investor interest since the idea was first revealed. This shift will have a huge impact on the platform by overhauling the entire mechanics.
As stated by the Ethereum Foundation, the merger will take place in two phases. The first phase is the Bellatrix network upgrade, scheduled for September 6th at 11:34:47AM UTC. The network upgrade will be followed by the Paris upgrade, which will complete the transition of the execution layer from proof-of-work to proof-of-stake. The Paris phase is scheduled to take place between September 10 and September 20, 2022.
As the transition progresses rapidly, it is important to understand what will happen to Ethereum miners. Merge’s upgrade means miners will be replaced by validators, as Proof of Stake relies on validators to validate transactions to keep the system running. Validators should stake some native tokens they hold.
So the real question is: what happens to Ethereum miners and their multi-million dollar mining rigs?
Will miners see decline after Ethereum merger?
Mining boomed to become a billion dollar industry. Miners working in this industry are responsible for solving complex mathematical problems and adding transactions to the blockchain. Miners do the mining work for which they are rewarded.
The merger will replace mining with staking, which means miners will be truly out of work. Mining is indeed an energy-centric process with high demands on energy and electricity. PoS aims to reduce this energy consumption by about 99%.
Mining pools have been suggested to turn to Ethereum Classic as a target for their expensive and powerful dedicated computers. So far, different miners are coming up with their own unique ways to deal with this situation.
Last month, mining giant and Bitmain’s mining pool AntPool announced that it had invested $10 million in developing an app to shift its focus to Ethereum Classic.
Ethermine, one of the largest Ethereum mining pools, informed people about its beta staking pool service.
The expected path is a potential Ethereum hard fork. However, the exact probability of such a hard fork remains questionable and minimal.
As the network gets closer to Merge, the co-founder of Luxor Technology expresses his opinion on the fact that the Ethereum Foundation moved too quickly with the decision to switch to PoS, giving miners and Holders caused millions of dollars in losses.
However, the majority of the community seems to support Merge as it will make the network faster and more power efficient.
Ethereum developers revealed that the merger will take place on September 15. However, there is reason to believe that the date may be based on hash rate.
Recently, Teku released the first phase of Bellatrix and Mainnet updates. The Ethereum 2.0 client also released the required update v22.8.1 for all mainnet users in preparation for the merger. All Ethereum mainnet users must upgrade to the new version by September 6, when Bellatrix will be activated on mainnet.
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