Prospect of Ethereum Miners: What Will Take Place Post the Merge?

After many delays, the Ethereum merge is set to happen in September. Some people are excited about the merger, and some are not. But not everyone agrees that proof-of-stake is the way to go.

Some Ethereum miners could split off and start their network through a hard fork.

Is it likely that things will get worse for Ethereum miners?

How does the Ethereum Merge work?

The Ethereum Merge aims to connect the beacon chain to the mainnet. This will be the last step in switching the main Ethereum network to the proof-of-stake consensus system. This next step had been thought out for a long time.

The beacon chain was put through many tests, and a network of validators (called “stalkers”) was set up.

Proof-of-Work was the only way for Ethereum to run for a long time. In the past, this made the network even slower and less useful.

With this change, Ethereum wants to make transactions more efficient and, as a result, the whole system more scalable. The most important part of the Ethereum 2.0 update is the merge.

Why should Ethereum miners care about the Ethereum Merge?

In the past, the proof-of-work consensus mechanism was used to verify transactions. This is the same way that Bitcoin works. How many transactions a miner can verify is based on how much “work” he does.

This ensured that the miners, who have very powerful computers, could verify many transactions and earn many ether tokens as a reward. As the rewards got less and it got harder to verify transactions, this “power” became more and more concentrated in a small number of Ethereum miners. These miners must change how they work now that proof-of-stake is being used.

Proof of Work consensus algorithm

In traditional book-money transfers, one central institution, the bank, keeps track of, clears, and verifies transactions. The people doing business with this instance trust it and may hold it responsible.

In a decentralized system, everyone on the network must agree on which history of transactions is correct. Even though a transaction, which is the information that I’m sending x units to address y, can’t be faked in and of itself if you don’t have the private key, how can I make sure that the network sees it? All consensus mechanisms assume that most people in the network are honest because the whole system would be useless if they weren’t.

There are two main ways to demonstrate this majority: the trustless solution and the non-trustless method. In the trusted case, every network node in the network is known. The information is true because the familiar network nodes have signed it. For the non-trusted, every node is anonymous and can join or leave the network anytime. Most cryptocurrencies use methods that can’t be trusted or a mix of both.

How did Ethereum try to stop miners?

The update to Ethereum 2.0 has been in the works for a long time.

The update’s most important part is changing how people agree on things. From the initiation, it was clear to the people who made Ethereum that the switch would be hard because powerful miners wouldn’t want to support it on their own.

So, during the transition, Ethereum took steps to make it easier for the change to happen. This included the so-called “Difficult Bomb,” which has made mining on Ethereum much harder in the last few months from a technical point of view. For example, many miners have been “forced” to switch to Proof-of-Stake in the past few months.

How does a miner of Ethereum fare?

After the switch, the Ethereum miners will have few options, at least in theory. After the merge, there shouldn’t be any work on these. So, the miners benefit from the fact that the switchover has been pushed back a lot over the last few weeks and months. Some miners were able to adjust in this way. There is still a chance that these can be used as validators in staking. Because most of the time, they have a lot of ether tokens.

Another possibility is that frustrated miners put a fork in the road. Ethereum Classic is another network that used to be part of the Ethereum Mainnet but broke away.

Angry miners may band together to force an Ethereum split.

Is investing in Ethereum secure?

At the moment, there is still a lot of doubt.

Over the past few weeks, the price of Ether went from $1,000 to as high as $2,000. But in the last few days, prices have dropped sharply back to $1,500 with lower goals. The Ether token sold better because people weren’t sure how well the Ethereum merger would go. Due to bad feelings in the crypto market, this drop was used to make even more money.

Investing in Ethereum presents more opportunity than danger.

Even if Ether goes down in the short term, it should go up again in the next few months or, at the latest, in the next bull market. But there is still a chance of higher price gains after the merger.