Skip to content Skip to sidebar Skip to footer


Ether miners are racking up losses after switching to lower-value cryptocurrencies such as Ethereum Classic and Ravencoin, following an Ethereum network upgrade that rendered much of their operations obsolete.

Ether Miners are racking up losses after switching to lower-value cryptocurrencies such as Ethereum Classic and Ravencoin, following an Ethereum network upgrade that rendered much of their operations obsolete.

The upgrade, known as “Fusion”, replaced the powerful graphics cards used by Ether miners with investors who stake Ether, in order to secure the Ethereum network and validate blockchain-encrypted transaction data.

The tokens that miners now seek to mine still operate under Ethereum’s old consensus mechanism, called proof-of-work. This means that miners can still use their graphics processing units (GPUs) to earn these coins. However, miners must compete to be the first to solve a math puzzle to earn a limited number of coins as a reward. The more miners, the smaller the reward. Subsequently, an influx of computing the power of Ether miners has caused mining revenues to drop below zero for other major alternative coins.

Those who mine Ethereum Classic for a profit “operate at negative profit margins of 30% to 40%, even the best the operatorssaid Ethan Vera, COO of crypto mining firm Luxor Technologies, which previously provided Ethereum mining services. About 25% of computing power flows from Ether miners to other coins, Vera calculates, using data from MiningPoolStats, a website that tracks computing power as reported by major crypto mining companies. .

It will be quite easy for miners to to change Ethash alternatives and other GPU-minable coins post-merger. The problem is, there’s a limit to how much computing power these other networks can absorb before the average miner becomes unprofitable – and that’s not much, writes Colin Harper, head of content and research in Luxor.

“As it is, I expect some of that compute power for Ethereum Classic to deplete the network because it’s not profitable to mine even people with good equipment and low-cost food,” Vera said.

Up to a million people were mining Ether with more than $10 billion worth of mining equipment before the merger, which was completed early Thursday morning New York time.

After the merger, some large-scale Ether miners such as HIVE Blockchain Technologies Ltd. and Hut 8 Mining Corp. plan to use their facilities for other purposes, such as high performance computing. However, the majority of Ether miners do not have the same ability to scale or the trading setup to pursue this, according to Vera.



Source link

Leave a comment