Since the long-anticipated and much-hyped Ethereum merge on Sept. 15, 2022, crypto miners have been shutting off their rigs and considering selling their computer graphics processing units (GPUs) because few, if any, cryptocurrencies are profitable if you try to mine them, at least right now.
With the merge, Ethereum phased out GPU-based mining, an energy-intensive process that Cambridge University researchers once claimed collectively consumed as much electricity as Pakistan.
GPU crypto mining involves using a gaming computer’s graphics processing unit — the same computer chips that bring color and animation to our screens — to solve complex math problems that verify electronic transactions on a blockchain. To mine crypto, digital coins must be built on a blockchain infrastructure that supports proof-of-work (PoW) mining, such as Bitcoin (BTC), Ethereum (ETH), Monero (XMR), Litecoin (LTC) and Dogecoin (DOGE).
With Ethereum’s merger, proof-of-work computing power has been replaced by proof-of-stake. Instead of running energy-intensive computations to mine new blocks, “stakers” lock up capital in staking services or self-run servers to perform the same function.
Most electricity used to mine crypto comes from fossil fuels. China, whose subsidized coal-fired power plants produce some of the cheapest energy in the world, banned crypto mining in May 2021 citing environmental and financial concerns.
Mining farms moved to North America, making the U.S. the top Bitcoin mining market with 35 percent of the global hash rate, followed by Kazakhstan with 18.1 percent and Russia with 11.2 percent.
The Ethereum merge is bad news for crypto miners who focus on Ethereum for income, PCMag reported.
“(The Merge) killed it all off,” said Philip Robb, a miner.
With their source of income drying up, ETH miners are looking at new blockchains for profit.
The only real alternatives for ETH miners after the merge are Ravencoin, Ergo, and Ethereum Classic – a blockchain that split from Ethereum in 2016 in the aftermath of the infamous DAO Hack, Forbes reported. Unlike other proof-of-work coins, these networks are GPU-mineable (they can be mined with PC graphics cards) and have potentially enough economic weight to be worth the effort.
The hashrate the day of the merge surged to all-time highs for Ethereum Classic (124 percent), Ravencoin (98 percent), and Ergo (146 percent). They have since fallen back.
Ethereum was trading at $1,330.72 as of this writing, Ravencoin was trading at $0.04137 and Ergo was trading at $3.16.
The price fallback after the post-ETH merge surge is proof that these networks cannot support the same amount of computing power as Ethereum, wrote Colin Harper, head of content at Luxor Technologies, in a Forbes column.
“With more miners on each network competing for the same level of rewards as before, revenue potential (what we call hashprice) for miners on these networks has dropped substantially,” Harper wrote. “We could rightly say that miners have gone from prospecting for oil to drilling for resin.”
Harper predicted that most ETH miners will sell their equipment or repurpose it for personal computer use “as the golden-era of GPU mining comes to a close.”
Many miners are turning off their rigs to save electricity costs. Some plan to sell their PC graphics cards on Facebook and eBay. “No one is profitable at the moment,” a miner said. “I’ll start selling the equipment soon. I have around 50 GPUs.”
However, some miners are taking a wait-and-see approach, allowing for the possibility that GPU-mining could one day make a comeback, PC Mag reported. “I think GPU mining will still have a place in crypto mining at least for a few years,” said Blake Teeter.
Others, like Philip Robb, say crypto mining is like playing the stock market. Ergo and Ravencoin could see explosive growth in the future, so mining them now could be worthwhile, even at a loss. “If you mine and hold, could be a lot more,” Robb said.