Sunday, June 19, 2022

The Change In Architecture Of Ethereum

As of June 15th, the Price of Ether, the Cryptocurrency of the Ethereum Blockchain, currency was down about 70% for the year. But, a lesser know factor, a tectonic shift known as the Merge, is set to end Ethereum Mining altogether, Cutting off Earnings for as many as 1 million People. This will be a huge Financial hit and a loss of a good income source.

Bitcoin and Ethereum, the Two largest Cryptocurrency Networks by Market value, both record transactions using a process known as Proof-of-Work, where so-called Miners dedicate Computer resources toward solving difficult Math problems to add blocks of Transactions to a Public Ledger. The Miners receive Payments in Cryptocurrency as a Reward.

Bitcoin Mining, which generally involves Specialized gear, has become Industrialized, and as Mining has moved to Data Centers, participation by regular People has basically been Eliminated. But Ethereum Mining relies on the kind of Graphics cards found inside typical Gaming PC's, and many regular People can still do it.

Proof-of-Work is just a contest to make Computers to work hard, which means it uses an enormous amount of Energy. The Environmental toll it takes in one of the primary criticisms of Cryptocurrency. Since Ethereum's beginnings, its developers have been preparing for a shift to an alternative model called Proof-of-Stake.

Under such a system, People would set aside, or Stake, a crtain amount of Ether, to win Rewards for running software that properly batches transactions into new blocks and checks the work of other Validators. Proof-of-Stake could cut the Power consumption of the Ethereum network by about 99%.

But, it would put Miners out of a Job, a significant blow given the Capital Investment that goes into setting up operations. Ethereum Miners have spent approximately $15 billion on Graphics Processing Units (GPUs), and that doesn't include Ancillary costs like Wiring and Transformers. The Merge is expected to take place in August, though No Official date has been given.

Miners won't be left with nothing. After the Merge, their Minning setups will still be Powerful Computer devices that can be put to use elsewhere, and some are planning to Mine other Coins or find alternative uses for their gear. After the Merge, Aaron Petzold, a recent College Graduate, is considering using his rigs for an aspect of Digital Video production know as Rendering.

Other Miners will move to Mine other Cryptocurrency. But others just feel Betrayed.

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