The Merge, a significant upgrade to Ethereum that has been in the works for years, has finally taken place, transferring the digital machinery at the center of the second-largest cryptocurrency by market value to a system that uses a great deal less energy.
The worst thing that could have happened to all miners dependent on ETH hashing for passive revenue was the ether (ETH USD) merger. As Ethereum switches to proof-of-stake, the formerly profitable effort has become useless. These miners currently have a ton of useless hardware behind them. Or is it not that useless? Several experts have noted that these miners really have a new use case to fall back on.
The network’s transition away from proof-of-work, which has been its consensus mechanism since 2015, is one of the major narratives resulting from the merger. With it, transactions can only be verified and completed after several challenging cryptographic challenges have been solved. Additionally, many riddles can only be resolved by powerful computers. Computers are used in the real crypto mining process to find the answers to these questions.
Any person with the ability to make money would find this chance to be appealing. You only need to purchase a mining rig. Naturally, these amateur miners also face competition from massive crypto mining farms run by businesses with hundreds of rigs. Significant criticism has also been leveled at the consensus process itself. Crypto skeptics point out that proof-of-work consumes significant energy and is often considered redundant for the market.
Ethereum can now operate with a considerably more energy-efficient mechanism thanks to the switch to Proof-of-Stake. This raises a lot of awareness about the environment and has the advantage of being considerably quicker and less expensive than proof-of-work.
However, it leaves a lot of miners behind. What will happen to all of the Ethereum mining equipment in existence? There should undoubtedly be a new application for them so that nothing ends up as e-waste. Then, there could be a remedy for this hardware in a different expanding sector.
The Ethereum merger allows thousands of miners access to cloud computing
Due to the hardware being taken out of operation, the Ethereum merging may have temporarily hindered miners. However, another cloud computing use case is starting to emerge. It may be equally profitable and save enormous volumes of e-waste from landfills.
According to protocol, miners cannot utilize their equipment; the merger would reportedly result in a lot of waste. Furthermore, just approximately 20% of all e-waste is recycled, as the publication notes. Experts advise that ETH miners can use their equipment in various inventive ways if they choose not to employ Bitcoin (BTC USD) mining rigs.
The process of blockchain validation is quite similar to cloud computing. Similar to how websites and other businesses outsource site hosting and online services to cloud computing providers, transactors on the blockchain outsource cryptographic hashing to these miners. This makes it possible for ETH miners to keep utilizing their pricey equipment after the merger.
One of the businesses launching ETH mining and cloud computing farms is Hive Blockchain Technologies (NASDAQ: BEEHIVE). The business claims it would use its 38,000 GPUs for mining Ethereum to provide customized web services to new clients. With its 180 machines, Hut 8 Mining (NASDAQ: HUT) believes it will follow suit and concentrate on machine learning and artificial intelligence applications (AI).
Nevertheless, there is a market for second-hand Ethereum mining equipment. This is due to the shared graphics hardware used by PCs. Investors will be less inclined to purchase a mining system that operates round-the-clock, meanwhile, as the CHIPS Act is anticipated to drive down inflated GPU costs. But experts are pointing to many other uses for these devices, which should reassure investors about the effects of post-merger waste.
What’s good for the Ethereum goose isn’t always good for the Bitcoin goose
The ability to update platforms exists in every cryptocurrency, but the Ethereum community takes this capability more seriously than most competitors. Except for a few adjustments to address unanticipated security vulnerabilities, Bitcoin (CRYPTO: BTC) hasn’t undergone much modification since its inception in 2009. The stability of Bitcoin is a benefit since users can be sure that there will only ever be 21 million coins available.
However, the biggest cryptocurrency needs to think about transferring from PoW to PoS (or another validation mechanism with less computational and power requirements) at some point. Years of preparation and testing in the more adaptable Ethereum community helped make that transition. Will there be a Bitcoin proof-of-stake variant this century? Most likely not.
Therefore, the two top crypto names are moving in glaringly divergent directions. It’s quite OK if not all cryptocurrencies fall into a single category. Every digital coin was created with its own characteristics and long-term objectives, and these basic variations will always guide their evolution. Investors should be open-minded about Ethereum since that is the way to go.
The future for developers after the Merge
The Merge won’t significantly affect developers soon, which is their main lesson. Their applications will function precisely as they did previously. It will, among other things, provide the groundwork for future network enhancements that will reduce congestion and boost scalability.
The fact that Ethereum apps are a “no-op” is exciting for developers, according to Rob Dawson, chief technology officer of ConsenSys, in an interview with SiliconANGLE. The blockchain software company ConsenSys is the source of MetaMask, the most popular Ethereum wallet on the planet. “We can do it in a fashion that doesn’t need any improvements or consideration of what they’re changing,” the speaker said.
He expressed the hope that it would be a “very boring improvement.” Since there has been extensive testing over the past few years and every edge case has been worked out, switching it on should be as simple as it sounds. Developers should have a similar experience.
The experience “should be smooth,” according to Dawson. We all go to sleep, and when we wake up the next day, we are all Ethereum proof of stake.
According to Dawson, the Merge will be significant for the basis it lays for future growth. With the help of that foundation, Ethereum’s capacity may be increased at the protocol level. As a result, it will be able to support more transactions, which will enhance throughput and decrease network expenses.
He claimed that Layer-2 scaling methods already work with networks like Polygon and Optimism. These blockchains offload Ethereum transactions by grouping them together on their own chain and then transmitting the data back to save costs. As a result, they operate more quickly, efficiently, and securely due to running on Ethereum itself.
These Layer-2 solutions will eventually be able to operate in conjunction with upgrades called Sharding, which splits databases horizontally to distribute the load to provide solutions at the core protocol layer. Distributing the stress brought on by the substantial volumes of data required by Layer-2 networks running on Ethereum will be beneficial. Sharding is anticipated to be accessible sometime in 2023 and becomes possible after the Merge.
Only 30 transactions can be supported per second on the Ethereum network at the moment, which causes congestion, delays, and expensive fees. This implies that when brand-new, ambitious initiatives are introduced to the primary network, they may have disastrous consequences. One recent and notable example is the introduction of the Otherside metaverse by Yuga Labs Inc., which resulted in a rise in transaction costs to about $7,000 per transaction in May.
For Layer-2 blockchains, Sharding enables more data availability, which might lead to networks that can execute more than 100,000 transactions per second, resulting in ultrafast transactions and extremely low costs.
The Merge’s greatest benefit, in Dawson’s opinion, is that it demonstrates that the community and devs considered the game’s future and its effects on the rest of the universe. That should appeal to developers who have been hesitant to join and the present developers who work on Ethereum apps, who won’t be affected by the Merge itself.
For many non-Web3 developers who claim, “I don’t want anything to do with that, this is horrible for the globe,” “I believe it helps erase the dissonance”, said Dawson. It allows even more developers to access a tested infrastructure. That has the most effect on developers who aren’t using Ethereum, and it offers us a chance to engage with them and let them know that it’s expanding, well-known, and capable of resolving issues in various use cases. And it’s a platform innovating with care and intention and will receive good support in the future.
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