ETH-mining is becoming unprofitable

Elena Klimovich

11:35 01/06/2022

ETH-mining is becoming unprofitable

Such conclusions were made after one of Vitalik Buterin’s latest interviews. Some experts and crypto users have found interesting details in his words.

The mainest is that lots of cryptocurrency holders don’t understand what will happen after the new PoS protocol is implemented. Today ETH-mining is based on a video card or ASIC-miner. But further, according to some opinions, all capacities will be stopped because the process will become non-profitable.

The implementation of PoS it’s not the end. Vice versa, it’s just the beginning because after setting Ethereum 2.0 experts wait for a very important hardfork. The reason is in “bomb of complexity” and all difficulties that it can provide. They are irreversible and under-appreciated.

There are a lot of miners and a major part of them prefer ethereum. It’s impossible to prohibit ETH-mining. That's why the best way is declining profitability. PoS will make ethereum-holders use mining based on depositin but the “bomb of complexity” will increase the time of each-block generation. For the first month it will be 1 second added to the common 5 minutes. Then 0.5 sec more etc. It will be almost insensible but the changes will increase and in less than 1 year the generation of 1 block will take 25 seconds.

What about the terms of activation? It's very difficult to make any forecast. Vitalik Buterin talked about PoS implementation in August but at the same time he noticed that unpredictable circumstances might appear. In this case it will be impossible to follow the deadlines. ETH founder suppose that each bug will demand to spend a few month for fixing but the “bomb of complexity” must explode in August.

Generally PoS might be realized in the autumn or even in winter and miners don’t care about it. But speaking about increasing the time for each block it’s a great problem. Today the cost of ETH is lower than it could be. We can see that mining is becoming unprofitable. Raising the period from 5 to 15 minutes will be a problem and it can appear until the end of 2022. Only increasing the cost of ETH can save miners.

Developers have changed deadlines for the key hardforks many times but now there is no spare time for it. That means the explosion of “bomb of complexity” and mining will become unprofitable soon.

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