In mid-September, the Ethereum community transitioned its consensus algorithm from proof-of-work (PoW) to proof-of-stake (PoS) in a process dubbed The Merge that reduced the power consumption of the Ethereum network by 99. 95%, and sounded the death knell for many blockchain miners. Now, anyone with a few coins, an average computer that could run a basic version of Linux could, simply by consigning a few ethers (thirty-two in theory, but there are services that allow you to put half or a quarter), obtain a virtually risk-free return close to a very attractive 8%.
Countdown to The Merge
Right now, if you Google The Merge, you’ll find a countdown to what may be a much more important event than many people…
The consequence was immediate: the large GPU farms destined to solve the complex cryptographic equations characteristic of the proof-of-work no longer had anything to offer to an Ethereum network that didn’t needed them any longer, and had to find other things to do. Some estimates suggest that, at its peak, Ethereum mining came to support more than a million people using equipment valued at $10 billion.
The possibility of mining other cryptocurrencies was there, but with the prospect of diminishing returns in an increasingly saturated market like bitcoin, in which miners, in any case, will lose most of their appeal when the last bitcoin is mined (more than 92% of them have already been mined) and have to survive on transactions alone, and in environments with little promise in the medium and long term like shitcoins, the difficulty was obvious. Some, after starting to lose money, simply ended up shutting down their servers.