Merge aftermath
The Merge may have launched smoothly, but the Proof of Work (PoW) Ethereum fork, ETHPoW, aimed at die-hard miners, is off to a troubled start. In its first 24 hours, the ETHW coin has lost 75% of its value and users report they cannot access the network using the information provided by the ETHPoW team. Miners, the targeted users of the network, appear to be earning only a tenth of what they were when mining PoW Ethereum.
Ethereum underwent its largest ever upgrade on Sept. 15, replacing the PoW consensus mechanism with Proof of Stake (PoS), reducing the network's energy consumption by 99.8% and dropping Ether issuance by more than 87%. Large Chinese miners planned to fork Ethereum and maintain the chain after The Merge, capturing headlines.
However, ETHPoW's debut faced criticism for delaying its launch until hours after The Merge. The project failed to prepare a block explorer, wallet, and public Remote Procedure Call software well in advance of launching. When ETHPoW published its network specifications around eight hours after The Merge, users immediately reported problems accessing the network due to its Chain ID already being used by another project.
ETHPoW's rocky start coincided with a bloodbath in the ETHW market, with the price plunging 75% to $12.29 over the past 24 hours. Most miners appear unconvinced by ETHPoW, with the network hosting only 70.34 terahashes per second (TH/s) of hashing power, compared to Ethereum Classic's 242 TH/s.
Despite hosting less than one-twelfth of Ethereum's pre-merge hash rate, ETHPoW is failing to provide EtHash miners with a profitable refuge. Daily ETHPoW issuance is worth just $167,000, equating to 0.8% of the value generated each day under PoW Ethereum. With only 8% of Ethereum's hash rate migrating to ETHPoW, ETHW miners' earnings have fallen 90% compared to when they were mining Ethereum.
The Merge transitioned Ethereum from a mining-based PoW blockchain to a more energy-efficient, scalable PoS system by joining Ethereum's mainnet with its PoS-based system, the Beacon Chain. This shift laid the foundation for future upgrades, like sharding, which can only work under a PoS consensus model.
The ETHPoW fork's troubled start has raised concerns among miners and the crypto community. The lack of organization, poor preparation, and issues with network access have resulted in many questioning the fork's viability and long-term potential.
As Ethereum moves towards a more energy-efficient, scalable PoS system, ETHPoW's struggles to gain traction among miners highlight the industry's shifting priorities. The Merge has already significantly reduced energy consumption on the network and laid the groundwork for future developments, such as sharding, which will further enhance Ethereum's capabilities.
In contrast, the ETHPoW fork seems to be struggling to offer a viable alternative for miners looking to continue with PoW mining. With drastically reduced rewards and mounting challenges, it remains uncertain whether ETHPoW will be able to establish itself as a sustainable option for miners in the long run.
While some miners may be unhappy with the transition to PoS, the overall trend in the industry is moving towards more environmentally friendly and scalable solutions. As Ethereum continues to develop and refine its PoS system, it will likely attract more developers and users, further solidifying its position as a leading blockchain platform.
In the meantime, ETHPoW will need to address its current issues and prove its value proposition to the mining community if it hopes to survive in the rapidly evolving cryptocurrency landscape. However, as the industry moves towards more sustainable and scalable solutions, the future of PoW-based forks like ETHPoW remains uncertain.