Has the Ethereum Merge Killed Cryptocurrency Mining For Good?

On 15 September 2022, the long-awaited Ethereum Merge finally happened. After a long time using a proof-of-work consensus mechanism, the Ethereum blockchain finally transitioned to proof-of-stake, the same system used by other cryptocurrencies like Cardano, Solana, and Polygon. With it, Ethereum’s energy consumption was dramatically reduced.

It also claimed another casualty: cryptocurrency mining.

But is crypto mining dead as a result of the Merge? Or do Ethereum miners have a chance at mining other cryptocurrencies?

What Was Ethereum Mining and Why Has It Stopped?

Pre-Merge, the two top blockchains, Bitcoin and Ethereum, worked on a proof-of-work mechanism. That meant that people could mine—lend computing power so the blockchain can verify transactions—in exchange for a reward. Every block mined rewards users a certain amount of cryptocurrency—thousands of dollars per block (plus transaction fees). To make mining easier, some miners organized in “pools” where they would pool computing power and split the reward of each block, with rewards paid out depending on how much computing power each miner contributed.

Bitcoin was initially mineable with consumer hardware (CPUs), but down the road, the mining difficulty increased to the point where purpose-built mining hardware like ASICs are needed to have a remotely acceptable profit. The difficulty of Ethereum, however, didn’t increase that much. That, combined with the fact that the Ether cryptocurrency skyrocketed in price (reaching an all-time high of $4,800 at its peak), meant that Ethereum was an easy blockchain to mine in, one that gave amazing profits to even small-scale miners.

For example, with an NVIDIA GeForce RTX 3070, you could mine up to $25 a week or $100-$125 within a month (depending on your electricity costs!). With a high-end RTX 3090, you could easily make over twice that amount. Once you’ve recovered the money you invested, it was basically a completely effortless, stable income. The Ethereum mining rush was partly to blame for the fact that the RTX 3000-series GPUs were non-existent on store shelves when released in 2020, with crypto miners immediately snagging the few GPUs that did make it to retail.

Of course, all (good?) things eventually come to an end. As profitable as Ethereum mining was, the power consumption generated by that practice was enormous, ultimately damaging the environment. And the network itself was volatile, to the point where gas prices could spike and make transactions absurdly expensive. The Ethereum 2.0 Merge aims to fix both issues for the greater good, moving things forward to proof-of-stake. But in the process, it’s leaving miners behind without their main source of income.

Ethereum Mining Alternatives

Common logic would dictate that if Ethereum mining is gone, people can go and mine something else. And while they can (Ethereum 1.0 miners are trying very hard to come up with an alternative), it’s not as simple as that.

Let’s look at some alternatives miners are considering.

Alternative Blockchains/Coins

First off, the obvious option: try something else. There are plenty of cryptocurrencies out there, like Ravencoin, ZCoin, and others.

Bitcoin mining is out of the question, as it’s so difficult to mine that trying to do so with a regular GPU-based rig is pointless, especially if you’re a small-scale miner. If you want to see an acceptable profit, you’ll need an ASIC-based rig, which can be costly. With the price of Bitcoin fluctuating heavily, even if it’s profitable at a certain point, a sharp drop can turn the scene around completely.

As for other cryptocurrencies, the difficulty might not be high, but most of them lack a tangible community, and as a result, they’re not that valuable. When you mine something, you do it to get a reward out of it, and if that reward is worth basically nothing, there’s no point in doing so. The most you can get out of Ravencoin with an RTX 3090 is $25 a month, and other cryptos offer even less. Are you actually making money or just damaging your hardware and wasting resources to get a few extra dollars in exchange?

Ethereum Forks

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Of course, we also have Ethereum forks. Two particular forks have made headlines since the Merge. Ethereum Classic (ETC), the original Ethereum blockchain, predates the Merge by a few years, and is the continuation of the first iteration of Ethereum. Ethereum 1.0 was actually a fork of ETC and became the more popular option.

Furthermore, post-Merge, a new fork also appeared, dubbed “Ethereum Proof-of-Work” (ETHW).

Both ETC and ETHW are potential replacements for Ethereum to keep the dough rolling. And indeed, due to media attention and miners gathering around each crypto, their price has increased. ETHW was trading at roughly $5 when The Merge took place, and its price was around $8 as of the time of writing, as per CoinMarketCap. Looking at the CoinMarketCap ETC chart, that currency’s price has dipped. Even if they manage to go up, whether they’ll keep the momentum is another thing. Mining something alone doesn’t guarantee it’ll go up in value. It’s a matter of supply and demand—there might be a lot of supply, but if there’s no demand, it will be worth nothing.

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According to TheNewsCrypto, one of the organizers of the ETHW fork, Chandler Guo, believes the ETHW price will eventually catch up with Ethereum down the road, over the next decade. He’s very optimistic about it, but the outlook is muddier for us. We also need to keep in mind that for many miners, mining was their main source of income. Most crypto miners are not in it for the long haul and won’t mine something blindly believing in a concept or the hope its price will increase in 10 years. They want money now. And right now, as of the time of writing, neither ETC nor ETHW is profitable to mine. You’ll get, at most, a few cents every day.

Crypto Mining is Dead (At Least for Now)

Unless a new, shiny alternative to Ethereum comes up, one that people will actually want to use for other purposes that aren’t just mining, GPU crypto mining is effectively finished. If you have a GPU-based rig, there’s essentially no purpose right now to mining.

You’ll be damaging your hardware, bringing your power bill up, and all for a few cents. It’s not worth it, if you ask us.