Ethereum merger completed smoothly, GPUs are free – Tom’s Hardware | Jewelry Dukan

In the early hours of today, September 15, 2022, the Ethereum community stood breathless. At 2:43 am EST, over 41,000 people watched an “Ethereum Mainnet Merge Viewing Party” via YouTube. The reason: a software upgrade to the Ethereum Virtual Machine (EVM) known as The Merge, the second most important event in Ethereum history, preventing its creation. After the first validation node was successfully brought online (with further consequences), Ethereum’s Proof-of-Work (PoW) was discontinued and replaced by Proof-of-Stake (PoS). Gamers and GPUs rejoice!

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The Ethereum merge has been a long time coming since its proposal (in December 2020) as a possible upgrade from Ethereum. The main feature of the merge is to allow Ethereum to transition from the energy-intensive PoW method to the far less demanding PoS. In PoW, validators/miners used the best graphics cards and maybe a few ASICs to crack the cryptocurrency’s Dagger-Hashimoto algorithm, securing the blockchain in the process and ensuring transactions are processed correctly.

PoS eliminates the computationally intensive security method. Instead, validators must prove that they are involved in Ethereum’s future by holding the equivalent of 32 ETH (~$50,615 at the time of writing) in their node. Holding those 32 ETH units theoretically means that these validators have the welfare of Ethereum in mind, as working against it or “poisoning” transactions is likely to hurt market perception and the value of Ethereum, and in turn reduce the value of their staked Ethereum tokens would.

One concern raised against the new PoS method is that centralized exchanges can participate in the staking process: users can directly stake their ETH with services like Coinbase. This has raised questions about Ethereum’s true decentralization. One of the discussed aspects of the merger was that institutions and law enforcement have greater power over centralized exchanges than over individual/organized miners. Lido, a community-led validator collective, controls over 30% stake in Ethereum’s PoS chain. Coinbase, Kraken, and Binance — three of the largest crypto exchanges — own another 30% stake in the network. This reads as if a few key figures are being entrusted with the keys to the kingdom.

Ethereum’s $60 billion ecosystem of cryptocurrency exchanges, lending companies, non-fungible token (NFT) marketplaces, and other apps is now said to be more secure and scalable.

Perhaps more importantly for our readers and PC enthusiasts (admittedly, some of whom have probably mined a lot), The Merge and the PoS transition finally puts an end to GPU mining on the Ethereum network, which has been online since July 2015 . Speculation ahead of The Merge was that this would result in a flood of used graphics cards from AMD’s RX 6000 series and Nvidia’s RTX 30 series hitting secondary markets. The result is that graphics cards already selling at a discount, like the $680 RX 6900 XT, could fall even further.

As of yesterday, the Ethereum network counted around 900 TH/s of primarily GPU-driven computing power. That equates to roughly 9.5 million RTX 3080 cards, but more likely a large mix of slower and older GPUs were also involved – meaning there were likely more than 20 million GPUs involved in Ethereum mining, more or less. Of course, that doesn’t necessarily mean that a mix of 20 million cards will suddenly come onto the market. However, if miners choose to outsource their graphics cards, Nvidia and AMD could face some difficulties selling new graphics cards at retail.

At least some graphics cards have been designed for alternative mining cryptocurrencies like Ethereum Classic (whose hash rate has already doubled since The Merge, up to 158 terahashes per second) and Ravencoin (also almost doubled from 8.9 TH/s to 15.9 TH/s). But as more miners turn to these coins, the mining difficulties imposed by the network become higher, driving down profits. Cryptocurrencies using PoW generally follow a formula that adjusts the difficulty of the algorithm to control the flow of new coins into circulation. This means more people are competing for a limited resource, and unless the price increases in step with hash rates, mining profitability will fall.

NiceHash GPU mining profitability, September 15, 2022

NiceHash GPU mining profitability, September 15, 2022 (Image credit: NiceHash)

Above is the data from NiceHash’s Mining Hardware page (opens in new tab), which is still based on the pre-merge values. We ran some quick tests with NiceHashMiner (and NiceHash’s QuickMiner) to see where things are right now. Before The Merge, a GPU like the RTX 3090 could fetch around $2.80 per day, and the RTX 3080 was around $2.30 per day, thanks almost entirely to Ethereum mining. Now? Oh boy how things have changed.

An RTX 3090 with NiceHash miner decided Autolykos with the most profitable choice for mining. At 245 MH/s, it fetched about $0.65 worth of BTC per day, while the PC consumed 400W (about 330W from the GPU). Ethereum Classic, meanwhile, ran at 120 MH/s and consumed the same 330W, potentially fetching $0.33 per day. At a base estimate of $0.10 per kWh, that’s $0.80 in electricity consumed by the GPU per day and $0.96 for the entire PC, meaning every coin is far into the unprofitable territory with NiceHash at the moment.

Here is the full set of NiceHash Miner benchmarks for the RTX 3090 running the latest version 3.1.0.0 of the software. However, the GPU has been optimized for memory-intensive workloads like Ethereum, so these results should only be taken as a rough basis of what can be achieved.

RTX 3090 mining profitability after The Merge

(Image credit: Tom’s Hardware (and NiceHash))

What about direct mining? RTX 3090 data from WhatToMine (opens in new tab) suggests that you could earn as much as $1.35 per day with Mining Ergo (ERG) Mining, which uses the Autolykos algorithm. GPU power can potentially be dialed in as low as 260W, meaning you could potentially rake in $0.70 a day. That’s still far less than half of what the RTX 3090 did before The Merge, and it remains to be seen if the collective can emerge as a coin with sustainable mining profitability on GPUs in a post-Ethereum world.

The abandonment of GPU mining also means that Ethereum is improving its energy efficiency by leaps and bounds. Since graphics cards no longer have to perform complex calculations to power and secure the network, Ethereum’s energy consumption footprint (and carbon footprint) has been reduced by 99.9%, simultaneously reducing global electricity consumption by 0.2% has been reduced (which is still much less than the global energy consumption of electronics left on standby, by the way).

Interestingly, Ethereum saw no price action, positive or negative, after the merge. This is partly because most exchanges freeze Ethereum trades while waiting for the network switch. It is also possible that speculation has already entered the pricing in recent weeks, especially since the last successful testnet for the Merge Goerli took place a little over a month ago.

While the main Ethereum network has done away with GPU mining, existing communities of miners may still be trying to keep their cash cows going. Several proposals to copy the Ethereum blockchain while retaining the ability to mine (aka hard forking the network, as we saw with Ethereum Classic) have gained traction in the mining community. Making a new coin based on an existing coin is not difficult; The real problem will be convincing cryptocurrency users of the usefulness of such a coin to give it a perceived value.

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