Major mining companies and mining equipment manufacturers are betting millions on investments to mine ether. Despite the arrival of Ethereum 2.0 scheduled for 2022, which changes the consensus protocol to Proof-of-Stake.
The large mining companies in the market are betting on an imminent delay.
The Proof-of-Stake update brings several improvements to the cryptocurrency, including power optimizations. Recently, the ‘London’ update was timed as a temporary update to ensure investors transition to Ethereum 2.0. London implements two EIPs (Ethereum Enhancement Proposals), EIP-1559 and EIP-3238. For example, the EIP-3238 implements a kind of time bomb, which little by little makes it difficult to extract ether, with the intention of stimulating the transition.
However, as published by Exame, companies such as Hut 8 and Hive, as well as mining equipment manufacturers such as Bitmain and Innosilicon are betting on delays and investing to step up mining. Mark D’Aria, CEO of Bitpro, a consulting firm for the Ethereum network, says that despite the difficulties, the blockchain will continue to grow. “They told us that mining would end four years ago and we are still here. He always had a ‘wait and see’ approach, things tend to take longer than anyone thinks, “commented Mark.
Proof-of-Stake (vs proof-of-work)
The CEO also says that the great difficulty of the transition is for those who have a lot of assets on the Ethereum network. “One thing that is not really understood is how much resistance there will be to this migration. To think that they are just going to touch a button and shut down billions of dollars from the miners is crazy, that is not going to happen ”.
In this way, the possible delay in the transition would become a good opportunity for mining.
Implementing the proof-of-stake validation method can reduce estimated power consumption by 99.95%. In addition, the proof of participation breaks the need to invest in high-performance systems to participate in the blockchain, this favors the decentralization of the cryptocurrency. This alteration should also prevent dangerous situations that result in the death of miners. But until it is actually implemented, a lot can happen.