Here’s How the Ethereum Merge Will Impact Miners
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The date for Ethereum’s transition from a Proof-of-work based consensus mechanism to a proof-of-stake mechanism is inching closer. The change is being done to lower the energy consumption, and carbon footprint produced by the traditional PoW mechanism.
The much-anticipated upgrade of the Ethereum network has intrigued investors ever since the idea was first disclosed. This transition will have a huge impact on the platform by refurbishing the entire mechanism.
As stated by the Ethereum Foundation, the Merge will take place in two stages. The first stage is the Bellatrix network upgrade, which is scheduled for September 6, at 11:34:47 AM UTC. The network upgrade will be followed by the Paris upgrade, which will finalize the shift of the execution layer from proof-of-work to proof-of-stake. The Paris Stage is scheduled to happen between September 10 and September 20, 2022.
With the transition progressing quickly now, it is important to find out what will happen to the Ethereum miners. The upgrade of the Merge means that miners will be replaced with validators, as the proof-of-stake depends upon validators to verify transactions to keep the system running. The validators are supposed to stake some of the native tokens that they hold.
So the real question is: what will happen to the Ethereum miners and their millions of dollars worth of mining rigs?
Will Miners see a fall after the Ethereum Merge?
Mining has flourished to be a billion-dollar industry. The miners working in the industry are responsible for solving complicated mathematical problems and adding transactions to the blockchain. The miners do the mining work for which they receive rewards.
The merge is set to replace mining with staking, which means the miners will be literally out of their jobs. Mining is indeed an energy-centric process with high energy and power requirements. PoS is intended to subside this energy consumption by approximately 99%.
Mining pools have been recommended to shift to Ethereum Classic as the target for their pricey and potent specialized computers. As of now, different miners are suggesting their own unique ways to tackle this situation.
Last month, Mining rig behemoth and Bitmain’s mining pool, AntPool, made an announcement that it has invested $10 million for the development of apps to shift its focus to Ethereum Classic.
Ethermine, one of the largest Ethereum mining pools, informed people of its beta version of the staking pool service.
An anticipated pathway was a potential Ethereum hard fork. However, the exact probability of such a hard fork is still questionable and scanty.
With the network moving closer to the Merge each day, the co-founder of Luxor Technology expressed his views on the fact that the Ethereum Foundation is moving too fast in its decision to switch to PoS, causing millions in losses for miners and holders.
However, the larger part of the community seems to be favoring the Merge, as it will make the network faster and a lot more energy efficient.
Ethereum developers revealed that the merge will be taking place on September 15. However, there is reason to believe that the date could change depending on the hash rate.
Recently, Teku released a first-stage Bellatrix And Mainnet Update. The Ethereum 2.0 client also released a required update v22.8.1 for all Mainnet users in order to prepare them for the Merge. All Ethereum Mainnet users have been required to upgrade to the newer version before September 6, as by then, Bellatrix will be activated on Mainnet.