Ethereum: largest mining pool ready to quit

On September 15, the world’s largest Ethereum mining pool, Ethermine, will cease operations. 

It revealed this recently in an official statement announcing the end of the Ethereum mining phase with PoW. 

Ethereum mining pools abandon operations after Merge

On September 15, the final Merge of the old PoW-based blockchain with the new PoS-based Beacon Chain is expected to take place. From that point forward, it will no longer make sense to mine ETH, since the new blockchain does not require mining to validate blocks. 

The decision is not as obvious as it might seem, because until the so-called “difficulty bomb” is applied it may still remain convenient to mine ETH on the old blockchain. However, the risk is that we may not be able to sell mined ETH, since almost all exchanges after the Merge will support ETH 2.0 on the Beacon Chain instead of classic ETH on the old blockchain. In addition, the difficulty bomb is expected to arrive soon after the Merge. 

So, as Ethermine puts it:

“It will no longer be possible to mine Ether on the Ethereum Network using Graphic Cards (GPUs) or ASICs.”

Therefore, Ethermine’s mining pool will cease its operations, having at that point become useless. 

In fact, they have decided not to offer dedicated mining pools for any of the PoW forks that have already been planned. Some ETH miners, in fact, will continue to mine, but with a forked protocol that does not involve either Merge or abandoning PoW to switch to PoS. However, to date, no major platform yet seems to have clearly and explicitly stated that it will support these forks. 

Ethereum Classic (ETC) mining

On the other hand, the mining pool on ETC (Ethereum Classic) will, of course, remain in place, as there are no plans to abandon PoW on this blockchain. 

It is very likely that some of the hashrate currently dedicated to ETH, and no longer usable as of September 15, will be turned right back onto ETC.

In fact, ETC’s hashrate has already touched new all-time highs this August, exceeding 40THash/s for the first time in its history. Previously, before the Merge announcement, it had never risen above 30THash/s. 

However, this dynamic is collapsing profitability. The current level, i.e., $0.0124 per day per MHash/s is at the levels of March 2020, which is when the price of ETC collapsed below $5 due to the collapse of the global financial markets due to the onset of the pandemic. 

Since then, the price of ETC has first returned above $10, and then even to an all-time high of $167 in May last year. However, the current price, i.e., just above $30, is still 81% below the high, although 1,520% higher than the March 2020 high. 

It must, however, be said that ETC does not seem capable of taking ETH’s place unless the Merge is unsuccessful. Since, however, all tests done have been positive, it is difficult to imagine such a scenario at this time.