Ethereum Merge will see miners swamp to other coins
Ethereum Merge is set to take place in a few days, and White Rock’s CEO believes it will lead to other coins experiencing an increase in miners.
The Ethereum network is set to transition from a proof-of-work (PoW) consensus to a proof-of-stake (PoS) mechanism later this month. The move is designed to upgrade the Ethereum blockchain to make it faster, more scalable, and reduce the cost of transactions.
However, Andy Long, CEO of Bitcoin miner White Rock, told Cointelegraph in a recent interview that the transition is likely to flood the crypto industry with out-of-work ETH miners.
Long said Ethereum miners would be looking for greener pastures following the Merge event, and this will swamp other coins, increasing mining difficulty and reducing profitability. He added that;
“As GPU miners point their hardware at other chains, their difficulty will increase, causing lower returns and splitting the reward amongst more miners. Hashrate will flow to alternative GPU PoW coins, and many miners will simply give up and try to sell off their farms of cards.”
The CEO believes that the migration would likely force some cryptocurrency miners to give up and abandon their mining rigs. He added that;
“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.”
In recent months, GPU prices have been declining, correlating with the decrease in the prices of Bitcoin and other cryptocurrencies. As a result, some companies are selling their rigs below the list price, while sellers who maintained the normal prices are struggling to offload mining rigs and cards.
Despite the upcoming Merge, Long said he is interested in seeing how the market forces play out in the long term. He said;
“When I was building GPU farms in 2017, the Merge was cited as an imminent threat and would have been much more impactful then. There will always be GPUs mining some GPU optimized chains, but I doubt we will return to the levels of revenue seen in ETH proof-of-work at its peak ever again.”
Ethereum’s Merge event is slated to happen between September 10-20 and is considered one of the most significant upgrades in the cryptocurrency market in 2022.