Ethereum miners are thinking of boycotting Ethereum mining in response to Ethereum’s new update EIP 1234. The new update reduces the block reward from 3 ETH to 2 ETH. The drop in the value of Ethereum, speculations of an even bigger Ethereum dump and the reduced block rewards have made many miners anxious.
Moreover, the shift from GPU mining to ASIC mining has made many miners unhappy, some of whom have spent more than $100K in building mini mining farms.
“The hype for Ethereum is gone, both in terms of mainstream folk and people that mine. A recovery to $1,000 seems unlikely right now, when you add on the fact that ASICs will own the network within a year it is safe to say that GPU mining this coin is going to be non-viable.”, says Reddit user UltraBallUK.
In April 2018, mining giant Bitmain had introduced Antminer E3. E3 is a dedicated hardware to process Ethereum computation faster and increase the software rewards of the blockchain. ASIC miners would increase the network’s capacity and decrease the time required to mine Ethereum.
ASIC miners would mine Ethereum blocks faster than GPU miners, thus making it difficult for GPU miners to mine Ethereum blocks. This would make existing GPU mining infrastructure obsolete.
In August 2018, Ethereum developers in an online conference agreed to reduce the block reward from 3 ETH to 2 ETH. This was done under a proposal called EIP 1234, which proposed that by delaying the block reward the Difficulty Bomb can be delayed.
In response to EIP 1234, which goes live in October 2018, Reddit user Darius510 posted on the /r/EthereumMining subreddit, asking where is the resistance against changes that affect miners. He asked, “Why is everyone just rolling over regarding the drop from 3 ETH to 2 ETH? Why is everyone accepting PoS as inevitable, or even the ice age?”
His post received a mix of comments, some in favour of the new update while others in favour of 3 ETH reward per block.
“Ethereum devs do not care about the miners”
GrandpaEthereum, another Reddit user, made the statement that “Ethereum devs do not care about the miners”. Some miners decided to unionize and boycott Ethereum mining, in favour of mining new coins.
Few miners on the Reddit thread discussing the new updates to mining also suggested the forking of Ethereum’s current codebase and running it under the name of Ethereum Original.
This scenario of the differences between Ethereum developers and miners is similar to that of Bitcoin miners and developers, which ultimately led to the forking of Bitcoin and creation of Bitcoin Cash.
The constant decline in the value of Ethereum, combined with the increasing difficulty of mining a block has made Ethereum mining close to unprofitable. According to TrustNodes, it costs $152 of electricity to mine 1 ETH, which is $20 less than the current price of Ethereum. There is also an additional cost of mining equipment, storage and if it’s a large mining farm then the cost of the workforce.
Apart from being unprofitable to miners, Ethereum’s cofounder’s comment in an interview conducted by Bloomberg sent Ethereum price down by 9%. within 24 hours today and is trading at $172.
Vitalik’s said that cryptocurrency and blockchain space won’t see another 1000x growth. His comments generated a huge amount of backlash from the cryptocurrency community including Binance’s founder CZ.
Vitalik clarified his comments on Twitter stating that there is room for growth; but not 1000x growth, which would mean 70% of the world’s money is into cryptocurrencies.
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