The Ethereum network is set to switch from its current proof of work model to a proof of stake algorithm, which could drastically reduce energy consumption and leave some expensive technologies looking for new uses. This means that Ethereum mining could soon become a thing of the past, leaving up to 1 million miners without a source of income. Once the Ethereum 2.0 Beacon chain is merged with the existing Ethereum network, mining will no longer be necessary. Miners will no longer receive block subsidies, transaction fees, or any extractable value from miners (MEV).
Instead, those rewards will be given to users who contribute to network security by staking their coin holdings in increments of 32 ETH. Under the current proof-of-work system, miners must solve complex mathematical puzzles in order to validate transactions. This process has been criticized for its negative environmental impact due to the intensive use of computer energy and electricity. The difficulty bomb was an anticipated exponential increase in the degree of difficulty in solving these puzzles.
Ethereum 2.0, or ETH2, is designed to be more scalable, secure and sustainable, reducing energy consumption by up to 99.95%. As a result, mining Ethereum will no longer generate revenue. Ethereum co-founder Vitalik Buterin recently announced that the cryptocurrency is aiming to transition from its traditional mining model to a “proof of stake” algorithm later this summer, likely in August. For miners who are worried about their future income, there are still other options available.
There are many other chains that support GPU-based mining, so miners could simply choose to start mining other cryptocurrencies.
