Ethereum will no longer be mined if you are curious as to what will happen, Ethereum will move to Proof of Stake, this has been in the pipeline for years, but is the closest to manifesting itself into a reality now. We will most likely see this change occur in January of 2022, what impact will this have on GPU mining? Here are some of the likely things that could happen:
Less LHR to worry about:
If you have been mining for a while, you will be familiar with LHR(Light Hash Rate). This was NVIDIA‘s attempt to ensure it was more difficult to use GPUs for mining. However, LHR mainly impacts Ethereum mining, which means that if ETH cannot be mined anymore, your GPU will be able to mine another algorithm pretty much on full hash power.
There are some other algorithms that are affected(mainly the memory-intensive ones), but nowhere near the impact as ETH. It is unlikely that NVIDIA will add another version of LHR to the 3000 Series. since they are already working on the 4000 Series. And even if they do, it only took a few months for developers to find a workaround to bypass the LHR anyways, and more people will find ways as time goes by. Needless to say, if you bought GPUs recently, you will still be able to mine with them for a long time, and most likely with even better hash rates once ETH goes to PoS.
Open Playing field:
When ETH stops mining, this will leave a space where there is less of a gap between the profitability of the other algorithms, which is always good for competitiveness and will likely mean that there is room for rapid growth.
We can expect to see other algorithms pick up hash rates and pick up pace in their market cycle.
Miners will continue mining!
As long as there are coins to mine, which in all probability will be forever, miners will mine. This means that once ETH goes to PoS, miners will switch to other algorithms. While those may not appear to be profitable now, that is large because of all the attention that is on ETH.
Once it’s gone, the surge in hash rate to other algorithms will increase the level of interest in other coins, which will push their value up.
The difficulty will rise, and prices will follow:
Historically speaking, since the inception of crypto, it is very often that the higher the hash rate, the higher the price of the coin. The difficulty will be harder but the prices will go up, most PoW blockchains tend to go up in value when the mining increases simply because it means more people are using the coin(i.e changing to fiat to pay costs, etc. thereby increasing liquidity). Value is very closely related to usage in any economic model, be it gold, cash, or crypto. This is due to simple economics- the more something is used by people, the higher its value, More hash rate means more people are mining, which means more people are using, exchanging, and sending coins around, therefore raising the value.
As we know, the higher the hash rate, the higher the difficulty and therefore the lesser the profit, until the prices of the coins rise. So we will likely witness a few months of low profits, but this will be offset by the induced gains in the value of the coins being mined.
Any regulation will favour GPU mining over ASICs
We know that there are more regulations coming towards the Crypto industry, China has been the latest in a slew of countries to take steps against mining. However, this is a very tricky area to actually regulate in practice, and those likely to be most affected are big ASIC farms since they are very obvious on the grid.
Small miners with a few GPUs have nothing to worry about since it is physically impossible to stop them as they are spread all over millions of users’ homes.
Proof of Stake is relatively new:
While Proof of Stake does solve some of the issues of Proof of Work(such as environmental impact and scalability), it has the downside of encouraging centralized wealth. The move to PoS is also a very risky one, as it decreases liquidity(especially in the way that Casper is being implemented in Ethereum), and this could backfire in the long term.
We have yet to see the real-world impact of PoS being implemented, as only a few blockchains use it, and they have not been around for very long, and are not used for direct payments in the way Bitcoin is.
Decentralized algorithms will likely be favored:
As coins like ETH become more centralized, there will be a demand for a stronger decentralized version, as even Bitcoin mining is centralized to a certain extent, as only large ASIC farms can mine it at present. Other algorithms that resist ASIC mining are likely to gain popularity, as they embody the original ethos of cryptocurrencies’ economic freedom.
Lastly, miners are a resilient lot!
At the end of the day, anyone who has been in crypto for a while is aware of the volatile nature of investments, and that is partly what makes it so attractive. The real trick with this industry is to be patient. Maybe profits dive for a month, a few months, but just as things go down, they always go back up.
Ask anyone who bought Bitcoin 2 years ago, or 5 years ago, and had the courage to wait! Have the grit to HODL, or pay with crypto directly wherever possible, and enjoy the ride. The more of us use crypto, the better it is for everyone, and inevitably this industry will keep on growing.
Source: NiceHash
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