Ethereum miners are finding it increasingly difficult to make money after the merger, as too many of them are turning to alternative coins, crushing the profitability of mining.
Earlier Thursday, Ethereum, which is the second largest blockchain network in the world, switched its consensus algorithm to proof-of-stake from proof-of-work to increase efficiency and reduce consumption. of energy. However, the software update – dubbed the merge – also meant that miners were no longer needed to secure the network, so rig operators moved their machines to other PoW blockchains.
“Graphics processing unit (GPU) mining died less than 24 hours after the merge”, tweeted Ben Gagnon, mining director at Bitcoin miner Bitfarms (BITF). The three largest GPU chains have very low profits, and “the only coins showing profits have no market capitalization or liquidity,” he added.
The hashrate, or computing power, used to mine PoW altcoins like Ethereum Classic (ETC) and Ravencoin (RVN) doubled in the hours following the merger. Along with an increasing hashrate, however, the difficulty increases, meaning miners are less likely to successfully mine a block and reap the block reward.
The reward for mining an Ethereum Classic block about 24 hours ago was ETC 0.0186484, or about 70 cents, but a check in the last hour revealed it had dropped to just ETC 0, 00030658, or about 11 cents, according to Minerstat data. Similarly, RVN miners could earn RVN 30.28478584, or $1.77 per block 24 hours ago, and in the last hour that figure has dropped to just RVN 0.82968431, or about 5 cents.
“As suspected, too many ETH miners have switched to ETC,” said Ethan Vera, COO of mining services firm Luxor Technologies. tweeted Thursday.
“Even running next-gen hardware at less than 3 cents power isn’t profitable on ETC now… This price of electricity is far below what households in the United States are paying, and even at what industrial consumers like bitcoin miners are paying in several parts of the country.”
Vera valued that 20-30% of Ethereum miners have migrated to other networks, with the rest simply being shut down.
Read more: Vitalik Buterin Says Ethereum Merger Reduced Global Energy Consumption by 0.2%, One of Biggest Decarbonization Events Ever