Ethereum, like Bitcoin, currently relies on a mechanism called "mining" to create and distribute new cryptocurrency. Thousands of individuals worldwide participate as miners, operating expensive hardware to solve complex mathematical problems and earn Ether (ETH). However, a major upgrade scheduled for next year will fundamentally alter Ethereum's operations—phasing out mining entirely.
So, what happens to Ethereum miners after this transition?
From Proof-of-Work (PoW) to Proof-of-Stake (PoS)
Bitcoin’s 2008 whitepaper introduced Proof-of-Work (PoW) as a way to secure decentralized networks. Ethereum adopted the same consensus protocol at its launch in 2015. PoW ensures agreement among computers on transaction validity but consumes massive energy—drawing criticism from environmental groups.
Ethereum’s core developers have been working to shift from PoW to Proof-of-Stake (PoS) under Ethereum 2.0. This upgrade reduces energy usage significantly while enabling higher transaction throughput. Instead of miners, validators will secure the network by staking ETH, with malicious actors penalized by losing their stakes.
According to Ethereum developer Tim Beiko, mining will cease once the PoW chain merges with the PoS chain, expected by late 2022. Miners should "break even before then," Beiko advises.
Will Ethereum Miners Have Alternatives?
Michael Carter, a crypto miner and host of BitsBeTrippin, predicts minimal disruption before the merge. He’s analyzed profitability under various scenarios but remains prepared to pivot if another blockchain proves more lucrative.
Post-merge, miners face two primary options:
- Ethereum Classic (ETC): A 2016 fork of Ethereum with a $4.7B market cap (as of June 2022).
- Ravencoin (RVN): A lesser-known GPU-mineable token for asset transfers ($436M market cap).
👉 Explore GPU mining alternatives after ETH 2.0
ASIC miners, however, may struggle. "Ethereum ASICs will become obsolete," Carter notes, echoing a Reddit user’s blunt assessment: "They’ll be worthless."
Challenges Ahead
Not all miners welcome Ethereum’s changes. The London hard fork (July 2021) introduced EIP-1559, which burns transaction fees instead of paying miners. While supporters argue reduced ETH supply could boost prices, some miners oppose it.
Beiko warns that early exits could benefit remaining miners: "Fewer miners mean higher profits for those who stay." Still, many may persist due to sunk costs in hardware.
Compass Mining’s Will Foxley observes:
"Many aim to mine as much ETH as possible pre-merge, anticipating price surges post-transition."
Are Miners Prepared?
"Everyone knew PoS was coming," says Carter, but preparedness varies. F2Pool, Ethereum’s second-largest mining pool, already runs an Ethereum 2.0 validator pool and supported EIP-1559. Conversely, SparkPool (24% of Ethereum’s hash rate) opposes both EIP-1559 and the merge—though their influence may wane.
Beiko notes miners could fork Ethereum to avoid PoS, but such efforts risk irrelevance. Adaptation or obsolescence looms.
FAQ
Q: When will Ethereum stop mining?
A: Mining is expected to end by late 2022 after the PoW-PoS merge.
Q: What coins can GPU miners switch to after ETH 2.0?
A: Ethereum Classic (ETC) and Ravencoin (RVN) are top GPU-mineable alternatives.
Q: Will EIP-1559 reduce miner profits?
A: Yes—it burns fees instead of paying miners, though ETH price increases may offset losses.
Q: Can miners prevent Ethereum’s transition to PoS?
A: Unlikely. Core developers and validators are committed to Ethereum 2.0.
👉 Learn how staking replaces mining in ETH 2.0