If Ethereum merges, miners will flood other coins, says White Rock CEO
September 6, 2022 11:08 AM
In the race for profit, the Ethereum merger may force many cryptocurrency miners to abandon their expensive mining rigs.
As the Ethereum network moves away from a PoW consensus, the crypto industry will likely be inundated with unemployed ETH miners, causing a serious disruption for all PoW tokens.
CEO of bitcoin miner White Rock Andy Long said that he expects PoW miners to "flood" other coins in response to the upcoming Ethereum merger, making those coins harder to mine and less profitable for miners.
"As GPU miners divert their processing power to other chains, the difficulty of those chains rises, reducing miners' profits and distributing them among a larger number of miners."
Many cryptocurrency miners will be forced to sell or give up their expensive mining equipment, according to Long.
Hash rate conversion to secondary GPU There is a flood of PoW Coins, and many miners have given up and are trying to unload their card farms, he said.
To that end, he continued, "some miners will try to sell their High-Performance Computing (HPC) or GPU cloud services and will likely fail since there's too much capacity chasing a limited amount of demand."
As the price of Bitcoin (BTC) continues to decline, demand for graphics processing units (GPUs) also decreases, resulting in some cards selling for less than their list price and sellers struggling to unload GPUs and mining hardware by inflating their asking prices.
Whatever the outcome of the merger, according to Long,
not totally against it; curious to see "how market forces play out."
"The Merge was mentioned as an imminent threat when I was constructing GPU farms in 2017; had it happened then, it would have had a much greater effect."
"GPUs will always be used to mine some GPU-optimized chains," the author writes, "but I doubt we will ever again see the levels of revenue seen in ETH proof-of-work at its peak."
One of the most significant updates in the cryptocurrency market this year is Ethereum's planned switch to a Proof-of-Stake (PoS) mechanism between September 10 and September 20.
Bitcoin (BTC), Litecoin (LTC), and Bitcoin Cash (BCH), as well as Ethereum Classic (ETC), Monero (XMR), Zcash (ZEC), and Ravencoin (RVN), are just a few examples of cryptocurrencies that will continue their PoW journey (RVN).
A digital asset technology firm, White Rock Management operates cryptocurrency mining facilities in Texas and Sweden.