In a race to the bottom for profits, the Ethereum Merge may compel many crypto miners to give up and sell their pricey mining equipment.
The impending Ethereum Merge, according to Andy Long, CEO of Bitcoin miner White Rock, would push PoW miners to seek out “greener pastures” on other PoW blockchains and “swamp” other coins, increasing mining difficulty and decreasing profitability. He says:
“As GPU miners point their hardware at other chains their difficulty will increase causing lower returns and splitting the reward amongst more miners.”
The changeover of the Ethereum network from a proof-of-work (PoW) consensus is anticipated to result in a massive influx of idle ETH miners into the cryptocurrency market, severely disrupting all PoW currencies.
Long continued by saying that many crypto miners will probably be forced to give up and sell their pricey mining equipment due to the departure.
“Hashrate will flow to alternative GPU PoW coins, and many miners will simply give up and try to sell off their farms of cards,” he said.
“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,” he added.
As a result of falling Bitcoin (BTC) values, GPU prices and demand have already been declining, resulting in some cards selling below list price and dealers struggling to sell their mining rigs and cards for premium pricing.
Long asserts that he is “not strongly opposed” and curious to observe “how market forces play out” regardless of what transpires following the Merge.
“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.”
One of the most significant changes in the cryptocurrency market this year will be Ethereum’s switch to a proof-of-stake (PoS) method between September 10 and 20.
However, numerous cryptocurrencies, such as Bitcoin (BTC), Litecoin (LTC), and Bitcoin Cash (BCH), as well as Ethereum Classic (ETC), Monero (XMR), Zcash (ZEC), and Ravencoin, are still planned to follow the PoW route (RVN).
White Rock Management is a digital asset technology business headquartered in Switzerland that mines cryptocurrency using data centers in Texas and Sweden.
