Big changes after Ethereum overhaul

 After The Merge event, global electricity consumption decreased by 0.2%, many miners were unemployed but opened many innovations for the blockchain network.

The Ethereum overhaul ended on the afternoon of September 15 when The Merge took place successfully. One of the biggest rewards is that the Ethereum power consumption will be reduced by 99.9%. The Ethereum network continues to expand, but The Merge's impact is not unique to this blockchain network. It immediately affected energy markets around the globe; change the way the blockchain network works; remove the network of miners and most importantly make legislators look at Ethereum and crypto in general differently.

Global electricity consumption decreases

Before The Merge took place, Ethereum consumed about 112 TWh/year with proof-of-work (PoW) consensus. This figure is equivalent to the electricity consumption of the whole Netherlands. When switching to proof-of-stake (PoS) authentication, this amount of electricity is reduced to only 0.01 TWh/year.

During a live stream on September 15, Ethereum Foundation researcher Justin Drake stated: "Consolidation will reduce global electricity consumption by 0.2%."

Average annual electricity consumption of some countries and Internet services as of June. Source: Ethereum Foundation
Average annual electricity consumption of some countries and Internet services as of June. Source: Ethereum Foundation

Ethermine, the world's largest Ethereum mining company, announced a server shutdown, shutting down crypto mining operations shortly after The Merge. Instead, they will open a new branch of PoS for users to deposit Ethereum and perform validation tasks, making money.

Independent quoted Vijay Ayyar, Vice President of Luno exchange: "The move to PoS has opened up a more environmentally sustainable blockchain. The Merge can help improve the unpopular view of many investors. and retail".

The difficulty of many tokens increases

Immediately after the Ethereum merge event ended, the hashrate (hash rate - representing the computing power) of many cryptocurrencies increased simultaneously, including Ethereum Classic (ETC), Ravencoin (RVN), Ergo (ERG).

The reason is that when Ethereum removed the PoW mechanism, a series of miners turned to tokens that were still using the proof-of-work mechanism to continue mining.

While Bitcoin's hashrate is so high that traditional mining rigs can't compete with dedicated miners, smaller-cap tokens are the "fire-fighting" option for miners.

Ethereum Classic's hashrate spiked after The Merge event but gradually declined because of low returns. Source:
Ethereum Classic's hashrate spiked after The Merge event but gradually declined because of low returns. Source:

Data on 2miners shows ETC difficulty on September 15 to an all-time high. As of the afternoon of September 16, ETC's hashrate is up to 239 terahash per second (TH/s). Late yesterday, the index hit an all-time high of 308 terahashes per second and then gradually declined. The reason is that the miners simultaneously switched to "plowing" ETC, but after the calculation, there was no profit, so they left.

Miners waiting for Ethereum hard fork

A successful merger of the Ethereum network means that miners are excluded from this blockchain network. While mining other tokens is not profitable, even losing money, many miners are hoping for a hard fork (fork of blockchain) Ethereum according to the PoW mechanism, called ETHPOW for short.

The reason many miners put their trust in Ethereum PoW is because this is not the first time the network has hard fork. In 2016, a historic attack on the Ethereum blockchain network took place and took away 3.6 million ETH. The community was furious, demanding that Ethereum founder Vitalik Buterin reverse the entire transaction from the ledger as it was before the attack, returning the stolen ETH to its original owner.

This is unprecedented in the history of cryptocurrency before. Buterin goes against the blockchain's original idea of ​​irreversible transactions. Therefore, those who did not support this came together to create a new Ethereum network called Ethereum Classic (ETC). The biggest difference of ETC is that it retains the entire ledger and information from the first day of the Ethereum network launch, including the hack, ensuring 100% of the ledger is immutable.

ETC exists side by side with ETH to this day. However, the ETC token value is much lower than that of ETH because of few users. Now, after The Merge, major miners around the world are gathering to continue creating a new fork of Ethereum, retaining the PoW mechanism. Some small exchanges have also started to support ETHPOW, but miners have not been able to "mine" this token, while details about the mainnet (official network) are still unclear.

Experts estimate that with the current situation, ETHPOW will probably be the only "lifesaver" for miners. However, the success of this blockchain is still unknown. The value of ETHPOW also does not depend on the faith of miners but on how many applications are built on the platform.

SEC considers ETH PoS a security

Immediately after Ethereum successfully converted from PoW to PoS, the WSJ quoted the Chairman of the US Securities and Exchange Commission (SEC) that PoS can be considered a type of security.

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