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Ethereum miners at risk of ‘unemployment’

Future consolidation of the Ethereum network could remove miners from the network but make the blockchain greener.

“Kiln, the next version of Ethereum’s unified test network, is live,” said Tim Beiko, developer Ethereum announced on his personal Twitter account on March 14. This information immediately became the talk of the blockchain community.

Bloomberg review: “One of the main effects of Ethereum consolidation is removing miners from the network.” Miners are considered to be the heart of pioneering systems like Bitcoin, Ethereum. However, mining rigs are becoming increasingly power hungry, causing this blockchain network to face a lot of criticism. To make Ethereum greener, developers are working hard to move from a POW (Proof of Work – proof of work, done by miners) mechanism to a POS (Proof of Stake – proof of stake mechanism), which is created by token holders).

Ethereum core developer Dapp Lion said that the Ethereum network merger could occur in June. At that point, two Ethereum rewards per block will be lost. Based on BeinCrypto, this can eliminate the POW mechanism. Miners will no longer mine Ethereum with algorithmic engines, but will switch to the POS model, which reduces up to 99.9% of the energy used to maintain the network, which translates to lower CO2 emissions to the environment.

On the official blog, the Ethereum developers noted: “You should know that after a successful merger, the network will be completely POS. Mining will not be possible on the network.”

Tran Dinh, CEO of Alphatrue, said: “Most of the miners in Vietnam are mining Ethereum. Changes in operating model will force them to change their business model.” Mr Dinh cites statistics as of November 2021 from 3DCenter shows that the price of the video card – the component required to mine Ethereum – has increased by more than 90% compared to the listed price. “If miners invest in rigs at this stage, it could be severely affected. They may even have to ‘cut losses’ by selling their mining rigs if the transition from POW to POS happens more quickly,” he said.

Quoc Hoang, owner of a large-scale Ethereum mining farm in Dong Nai, said: “The launch of Ethereum 2.0 has been buzzing in the community for a long time. However, no one knows exactly when the network consolidation will take place. Even if miners are removed from the system, by holding Ethereum in bulk big, we can still ‘deposit’ and make a profit.The people most affected are probably small miners who have just invested. , have not yet recovered their capital. However at the moment, no one knows exactly when the Ethereum merger will be completed, so miners don’t really care. worried.”

The administrator of a large cryptocurrency mining group in Vietnam said that the above information is of great interest to miners, but has not yet recorded the sale of buffalo and plows. “In theory if the POW mechanism is removed, Ethereum mining rigs will also stop working, the market will see a sell-off. But miners are still waiting for information until the Ethereum network is formed. Join,” the person said. .

According to Tran Dinh, the launch of the Kiln is an important signal, investors need to pay attention as the price of Ethereum may fluctuate strongly in the near future. coin table recorded a 6.2% increase in Ethereum price within 24 hours of Kiln news launch. There are currently more than 10 million Ethereum with a valuation of more than 25 billion USD stored under the POS mechanism at an interest rate of around 4.8%.

Khuong Nha

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