Consequently, the network will abandon the proof-of-work consensus algorithm, leaving Ether (ETH) miners with very few options. Since their equipment will become obsolete, they will be forced to start mining altcoins, or recertify as ETH stakers. So, what is the current state of ETH mining, and what exactly will happen to the industry as a result of the upcoming transition?
GPU v. ASIC
The Ethereum consensus is currently based on the PoW system, which is similar to that of Bitcoin (BTC). Therefore, the mining process is nearly identical for Ethereum, as miners use their computation resources to earn rewards for each block they manage to complete.
However, there is still a major difference between these processes. While Bitcoin mining has become almost entirely reliant on ASICs — large, loud machines designed specifically for cryptocurrency mining that are mostly clustered in regions with cheap electricity — Ethereum’s PoW hashing algorithm, called Ethash, has been designed to favor GPU units issued by global chipmakers like Nvidia and AMD. GPUs are much cheaper and more accessible than ASICs, as Thomas Heller, the global business director of cryptocurrency mining pool F2Pool, explained in a conversation with Cointelegraph:
“Because ASICs are very specialized machines, when a new generation is released, it’s often a huge technology jump. So, their hash rate is much higher, and energy efficiency is better than the previous generation. That means that those manufacturers have spent a lot of money to research and develop it. Their machines are often quite expensive, while GPUs are a lot more affordable.”
Heller added that those using GPU miners “have much more flexibility in what you can mine.” For instance, an Nvidia GeForce GTX 1080 Ti card — a popular choice — can…