In September 2022, after much speculation, the Ethereum "merge" happened. This forever changed the way Ethereum operated and caused a big shift in how miners were able to generate income. Prior to the merge, miners were rewarded based on the amount of "work" they put into the network. However, post-merge, people are now rewarded based on their share of the total ETH supply. This change has caused a lot of miners to leave the network, as they are no longer able to generate income in the same way.
However, it is not all doom and gloom. Here's how ETH miners can survive the Merge.
What is the Merge?
The Merge is a now implemented change to the Ethereum network that saw it transition from a proof-of-work (PoW) consensus algorithm to a proof-of-stake (PoS) one. This has had major implications for miners, who play a vital role in maintaining the network, as essentially their function has been done away with. Ethereum insists the merge was undertaken to make the network more green, as PoS reduced energy consumption by 99%.
How did the Merge affect miners?
Under a PoW system, miners compete against each other to solve complex mathematical problems in order to earn rewards. This process requires significant amounts of energy and results in high transaction fees. However, under a PoS system, miners are done away with, and instead, transactions are validated by selected validators, who are chosen based on the amount of ETH they have staked.
The switch to PoS would likely see a reduction in transaction fees and energy consumption, as mining rigs draw a lot of power. However, it could lead to centralization, as those with large amounts of ETH would be able to stake more and have greater control over the network. This defeats the purpose of decentralized investments.
The merge has left miners without a purpose as they are no longer needed to validate transactions and earn rewards. This also means a lot of expensive mining equipment has gone to waste, generating unnecessary e-waste.
How to survive the ETH Merge
If you're an ETH miner, you've been thrown a major curveball. But it's time to shrug it off and pivot to not only survive but thrive post-merge.
First, you should start diversifying your income sources. If you are solely reliant on block rewards for your income, the reduction in rewards will have a significant impact on your bottom line. Look into alternative ways of earning revenue, such as mining on a new blockchain.
Why look for other cryptocurrencies when you can mine for an Ethereum hard fork, like Pulsar Chain? Pulsar is a PoW ecosystem committed to blockchain as it was meant to be - decentralized, forever.
Second, keep a close eye on your expenses. With less income coming in initially, you will need to be more mindful of how you are spending your money. You may need to cut back on some expenses in order to stay profitable.
Third, you should continue to invest in new and efficient mining equipment. Pulsar Chain offers double-block rewards for mining equipment powered by renewable energy sources. High electricity costs also eat into your profit margins so using renewable energy like solar power can leave you with higher profits.
By taking these steps, miners can increase their chances of weathering the storm after the Merge and come out ahead in the long run.
The bottom line is that ETH miners need to accept and be prepared for the changes the merge brings. By continuing mining on a fork like Pulsar Chain, e-waste is reduced and miners can continue to earn an income on a truly decentralized network.
By being prepared, ETH miners can ensure that they will be able to survive the merge and continue to profit from mining crypto. Visit our website for more information: https://www.pulsarchain.org/
Disclaimer: Readers should keep in mind that the information contained in this article does not constitute investment advice. The ideas and strategies presented should not be used to make any investment before assessing your financial situation and consulting a financial professional.