The crypto community is gearing up for a grand event in its own right – the departure of the leading altcoin from miners in favor of validators. After developers approved September as the closest date for the move, Ethereum jumped 65% in 30 days and has surpassed Bitcoin for the current year’s growth rate.
In the derivatives market, open interest in Ethereum overtook Bitcoin for the first time in history, experts from Bitsgap, which developed the most popular Binance trading bot, bet on the growth of the altcoin to at least $2200.
The transition from PoW (proof-of-work) to PoS (proof-of-ownership) is called a merger, as all key network parameters will be moved into the developing parallel test chain.
To stimulate the merger process, a complexity bomb will be activated in the PoW branch, causing it to die off naturally. The complexity bomb exponentially increases the complexity of mining, making it less and less profitable.
Miners will have to migrate to other networks to generate income, such as Ethereum Classic. However, not everyone agrees with such a role. For example, Chandler Guo, a major Chinese miner, suggested “cloning” Ethereum by creating the ETHPOW token. Some crypto exchanges have already supported this idea by issuing relevant futures. In particular, Poloniex, MEXC, and BitMEX have done so, and Binance has expressed possible support for the fork.
ETHPOW only has a chance if it is picked up by an impressive share of miners. At the moment, many doubt the expediency of another branching, because there is already a parent branch on PoW – its Ethereum Classic. In addition, the leading operators of stablecoins – Tether and Circle – have officially announced support exclusively for the PoS branch.
Despite the imminent cancellation of mining, miners are in no hurry to leave Ethereum. Thanks to the latest price hike, mining yields have increased from 1.4 cents in July to the current 2.8 cents per MH/s. For example, Bitmain’s latest E9 generates about $65 per day in revenue and reaches self-sufficiency in 6-8 months. Therefore, it is likely that a significant part of the hash will remain in Ethereum even after the merge.
The move to PoS is vital for Ethereum’s future development. The current mining process requires an increasing amount of energy, which not only negatively affects the ecology but also makes Ethereum increasingly centralized.
As a “soft” deadline for the transition to PoS developers designated September 19. If all goes smoothly, Ethereum will continue to strengthen against Bitcoin.
