The main mining companies are increasing their investments in Ethereum mining. Despite Ethereum’s imminent switch to proof-of-stake (PoS).
The Hard Fork London of the Ethereum network has already been launched including a series of changes that are expected to revolutionize the future of cryptocurrency in a way.
While Hard Fork London brings the network one step closer to Ethereum 2.0, significant updates throughout Ethereum’s six-year history have a history of multiple delays.
For example, the Constantinople update, which was a key step towards Ethereum 2.0, was originally scheduled to launch in July 2018. However, a bug in its code delayed its implementation until February 2019, leading to further delays in the migration.
To better understand, Constantinople is primarily defined as a maintenance and optimization upgrade. Because it has small improvements that will not produce a big change for the end users of the network. But if they will be highly technical in the efficiency of the same and the structure of the fees, as well as updates that pave the way for Ethereum’s anticipated scaling roadmap.
Ethereum miners make a multi-million dollar bet
An example of this, we have the mining companies of Bitcoin Hut 8 and Hive Blockchain. That they are increasing their capabilities to mine Ethereum, the second largest cryptocurrency by market capitalization.
«This operation serves to strengthen Hut 8’s objective of increasing revenue diversification. And to drive immediate short-term and long-term revenue growth targets forward in fiscal 2021».
Meanwhile, miner manufacturers like Bitmain and Innosilicon are set to launch new Ethereum mining machines later this year.
As a fun fact, this investment may seem strange, given that the Ethereum system is anticipated to migrate from PoW to PoS in four months. And PoS mining doesn’t require such advanced machines.
Incidentally, the surge in demand could be attributed to expectations that migration will be delayed, industry professionals said.
In this regard, Mark D’Aria, CEO of Bitpro said: “They told us that mining was going to end four years ago. And it still continues. It has always been a wait and see approach, things tend to take longer than everyone expects».
An ‘Ice Age’ for miners
Ethereum developers initially filed this EIP in 2015, but it was postponed until December 2021.
The move to Ethereum 2.0 will see a de facto migration to a proof-of-stake (PoS) model that requires users to leverage their existing Ethereum cache as a means to verify transactions and mine new tokens. This will continue to limit the amount of new coins created, but without requiring the massive energy expenditure of the PoW pathway.
According to Nic Carter, general partner at Castle Island Ventures and co-founder of Coin Metrics, the goal of the difficulty bomb is to force miners and node operators to update their software after a certain amount of time.
According to Ethan Vera, COO of Seattle-based mining company Luxor: «As the price of Ethereum rises, it can become more difficult to transition from the network to PoS».
«Even those who are optimistic about the transition from Ethereum to PoS still want to go slowly to make sure things are being done correctly. And let there be no potential doubts, traps, or blind spots that developers are missing.».
Finally, according to Vera: «The exact date of the historical migration from Ethereum to PoS is anyone’s guess. But a timely investment in Ethereum mining could bring big returns».
I close with this phrase from Ethan Vera: «The miners who bet against PoS two years ago made an outright slaughter. If you can bet against that, the payback could be quite lucrative.».