Ethereum miners were put on notice this week following a note from Tim Beiko, a ConsenSys developer and Ethereum community manager, alerting them to the imminent merge from Proof-of-Work (PoW) to Proof-of-Stake (PoS).
Beiko told miners to aim to “break even” by the end of 2021 as Ethereum moves from its current consensus mechanism to PoS. Developers are shooting for October 2021 in the Shanghai hard fork, although timelines could change over the coming months.
On a technical level, the merge will point all of Ethereum’s data – think accounts and balances of smart contracts and user addresses – to the PoS Beacon Chain for settlement just like mining does for PoW coins. By that point the Beacon Chain will have been online for close to one calendar year, but without any real world value.
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So, what about the miners?
It remains unlikely a PoW version of Ethereum forks off in any meaningful sense. Why? Because applications and businesses built on Ethereum such as the $80 billion stablecoin market will only recognize one chain as legitimate.
Miners will then have to point their hash at other blockchains that use the Ethash algorithm, such as Ethereum Classic. For example, creator of the Ethereum ASIC miner Phoenix, Linzhi, has planned to do so all along.
It’s less clear with Bitmain’s newest tease release of the E9 Ethereum ASIC miner. The machine is estimated to beat out other industry leaders by a wide margin: some 400 MH/s for the Linzhi and 900 MH/s more than the Innosilicon A11. But it comes as Eth 2.0 moves toward a realistic deadline and a global chip shortage. At this point, it’s anyone’s guess how many E9’s make it to market.