Ethereum, the world's second largest cryptocurrency, is set to receive an upgrade that will put an end to profitable mining. The upgrade, formerly known as “Ethereum 2.0”, is likely to take place later this year and will merge the Ethereum blockchain with the Ethereum 2.0 Beacon chain. This merger will bring about the “difficulty bomb”, a mechanism that eliminates the incentive to mine Ethereum in favor of staking. The difficulty bomb will cause mining difficulty to skyrocket, making mining Ethereum worthless and forcing miners to transition to a different currency or sell their graphics cards in favor of staking.
There are other Proof of Work cryptocurrencies that can be mined with consumer hardware for profit; however, with many Ethereum miners looking for new coins to mine, these alternative options may no longer be profitable. Burning energy into mining money from the Internet has been a controversial topic, so calls for cryptocurrencies to move to a more sustainable proof-of-stake algorithm have intensified. This is just what Ethereum is doing; once the merger occurs, transaction fee and MEV revenues will be awarded to users who contribute to network security by staking their coin holdings in increments of 32 ETH. The profitability of mining these altcoins fluctuates, but they are generally 30-50% less profitable than mining Ethereum at any given time.
This means that anyone mining ETH will have to make a difficult decision as to how they will come close to generating the revenues produced by mining Ethereum again. The difficulty of mining on the Ethereum blockchain has steadily increased over the past year due to the steady increase in the total number of GPUs actively mining ETH. This centrality can be seen once again in China's crypto mining ban; while Ethereum saw a decline of approximately 20%, Bitcoin lost nearly 50% of its total hashing power, demonstrating that a large part of total Bitcoin mining came from certain regions of China.There are many other chains that support GPU-based mining, so miners could simply choose to start mining other cryptocurrencies. Miners are developed from the ground up to mine a cryptocurrency very efficiently, which means that they can produce more hash rate with less electricity.
Stakefish is the sister company of f2pool, the second largest mining group; the two companies have long been planning the transition from Ethereum mining to staking, and sharing and coordinating human resources to do so.
