Robert Steinadler, 4 months ago
The Merge is expected to happen in September and the market has already acted. Ethereum has seen tremendous growth in price over the last two weeks and even outperformed Bitcoin. It remains to be seen if the event is already priced in or if we are going to witness more action once the Merge happens. Ethereum is racing towards proof of stake and this raises an important question. What are all those miners going to do once they cannot make a profit from mining Ether?
Ethereum Classic offers a serious opportunity and it seems that the mining industry is starting to back the network.
Ethereum Classic hasn’t seen the same support as Ethereum nor the same development as its bigger sister network. This means that Ethereum Classic also won’t opt for proof of stake and will stick to its proof of work consensus.
Once Ethereum’s difficulty bomb is coming into effect, miners won’t make any profits from directing their hash power to Ethereum. The elephant in the room is the question of where all this hash power will be directed after the merge has happened. Ethereum is the second biggest proof of work chain after Bitcoin.
Ethereum Classic seems to be the obvious choice. There are key differences between both blockchains but only marginal differences from the perspective of a miner who is looking to make the best use of his equipment. Of course, there are also other altcoins that could become a potential target. Since Ethereum Classic changed the algorithm to ETCHASH in 2020, its first and foremost GPU-miners who could potentially call ETC a new home.
The hash rate of Ethereum Classic is already increased since the beginning of July. The all-time high from May 2021 is still far away. Therefore, it is too early to jump to any conclusion if a miner exodus is happening. Since the hash rate can be monitored by anybody it will be easy to determine if Ethereum Classic will see some growth in the future.
For now, it looks like the mining industry is also taking a closer look at the possibility to adopt the ETC chain. Antpool, the world’s third-largest mining pool, just announced to support projects that are based on Ethereum Classic with $10 million. Even Vitalik Buterin said a couple of days ago that people should support Ethereum Classic if they are in support of proof of work.
With the mining industry in support and the Merge knocking on the door, the price for ETC jumped over the last couple of days. There are other factors like today’s FOMC meeting and the world economy who is looking at the possibility to enter a longer recession. It remains to be seen if Ethereum Classic can profit from growth in hash rate in such an economic environment and if this growth is indeed exceeding the all-time high of the hash rate.
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