2.0 is about to set sail, will the conversion of Ethereum to PoS be a counterattack opportunity for ETC?
This article is from:Hashpie (ID: hashpie), Author: LucyCheng, forwarded with authorization.
Hashpie (ID: hashpie)
, Author: LucyCheng, forwarded with authorization.
"When Ethereum turns to PoS, ETC will become the largest PoW Ethereum mining chain!" - As the migration of Ethereum 2.0 is approaching, the topic of whether ETC will inherit ETH's computing power and price is frequently raised again.
Picture taken from: Twitter of Ethereum developer Virgil Griffith
Picture taken from: Netizen Dan Williams’ Twitter
Some people think that this is an opportunity for ETC, and it will have the possibility to surpass ETH; some people think that with a market value of more than 30 times and a computing power gap of nearly 20 times, Ethereum, known as the "Chariot of Doom", Classic is a joke at all...... But compared to whether ETC will catch up with ETH, what is more worth studying is whether Ethereum Classic can successfully pick up the loopholes, so as to increase a wave of market influence?
Data source: Coinmarketcap, Bitinfocharts (Note: USD)
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Similar to BTC and BCH, there is also a relationship of computing power switching back and forth between the ETH and ETC mining chains of the same origin. Last month, taking advantage of the popularity of the Atlantis hard fork upgrade, Ethereum Classic began to increase its computing power in a straight line on August 19, with an increase of more than 35% within the month; There was a slight downward trend, falling by 7.5 percentage points within the week. While the computing power of the ETC mining chain soared from May to September last year, the computing power of the Ethereum mining chain also experienced a decline.
Historical situation of ETH and ETC network computing power (picture taken from: bitinfocharts.com)
However, this switching trend is not obvious. Since the birth of ETC, there has always been a multiple-level gap between the two mining chains, and it has gradually increased under the explosive growth of Ethereum in 2017; so far, ETH and ETC The computing power gap between them has widened to nearly 20 times. In addition, it can be seen from the fact that the fluctuation of graphics card mining computing power is in step with the rise and fall trend of ETH mining chain computing power. Starting to switch computing power to ETC or other GPU mining chains, most Ethereum miners still tend to stay in ETH or directly shut down and leave.
Left: Comparison of the total network computing power of each graphics card currency over time; Right: The proportion of computing power of major graphics card mining currencies
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The reason for miners to stick to the ETH mining chain is very simple, that is, stability and market size. As a blockchain network that occupies most of the computing power of the GPU mining industry, Ethereum has a leading edge in terms of market value, transaction depth, and market influence; compared with other graphics card mining currencies, it is more suitable for miners for a long time dig. For retail miners, although it is easy to carry out the operation of "which one has the highest profit", small coins are unstable and the bonus period is limited. After the short-term premium is smoothed out, retail miners have to find the next coin that can be mined. As far as large mine owners are concerned, a large number of switching computing power may cause other currency networks to be paralyzed. If a small amount of switching computing power is unstable and shuts down, the benefits are still not worthwhile. Panda Pool also stated earlier that the current mining scale of most graphics card mining currencies is not enough to accept a large number of potential miners who have withdrawn from Ethereum, and most Ethereum miners will continue to prefer to stay in Ethereum. To a large extent, the persistence of miners will also help support the price of Ethereum under the market.
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Comparison of the current network computing power of graphics card mining currencies (data source: wk588.com; time: September 25, 2019)
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Since November 2018, changes in ETC and ETH mining revenue (data source: wk588)
According to EIP7011, this stage will reduce the PoW block reward to 0.6 ETH; according to theoretical calculations, without considering the detonation of the difficulty bomb and the current level of Ethereum’s block production speed, the price of ETH must increase by at least 62 percentage points To 278 US dollars or the entire network computing power drops by 42% to below 100TH/s, the Ethereum miners can barely maintain the balance between income and electricity costs. However, judging from the past development progress and operations, before the Beacon chain fails to run stably, Ethereum will not rashly reduce the PoW mining rewards; moreover, the PoW mechanism is still dominated by the ETH chain at this stage, and only a small number of blocks will be released. Generated through the PoS mechanism.
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Before 2021 (completely switching to the PoS mechanism), in addition to the official launch of Staking by ETH, the unknown difficulty bomb should be more threatening to Ethereum miners. The difficulty bomb, which has been repeatedly postponed, will be detonated next March. If it is officially launched at that time, the PoW block generation speed of the Ethereum network will increase from the current 13 seconds to 38 seconds each month in the next four months. This means that under the condition that the current block reward remains unchanged, the ETH mined in a day under the PoW mechanism in June 2020 will be reduced to one-third of the current stage. Under the dual pressure of the block reward being divided by the PoS mechanism and the difficulty bomb, next year’s Q2 Ethereum miners will always have to choose to stay or stay.
Picture taken from: Twitter of Eric Conner, founder of Ethhub
For miners with better equipment and electricity cost advantages, it may last for a while; but most miners who cannot make ends meet or even dig out ETH will soon have to shut down and leave. Just like when the two difficulty bombs exploded in 2017 and 2018, most of the computing power will gradually escape from the ETH network. But the difference is that next year when ETH officially starts staking and gradually shifts to PoS, Ethereum miners will no longer have the option of waiting for opportunities and returning computing power to ETH. After leaving the Ethereum mining chain, they can only choose to switch computing power, let the graphics card return to the traditional market, or stay on the ETH chain to participate in Staking.
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(Image source: etherscan, bitinfocharts)
After analyzing it in this way, switching computing power and looking for a new leading currency in the graphics card mining industry is the choice that is more in line with the situation of Ethereum miners at this stage. In the absence of new graphics card mining star coins, ETC, which has a relatively stable performance and relatively good market depth, is to some extent the most preferred among them.
Comparison of the top 20 graphics card mining currencies by market capitalization (data source: Coinmarketcap, wk588)
Although the market value of Ethereum Classic is not as good as that of Monero, which also supports graphics card mining, it has more online exchanges, a higher daily trading volume, and a higher computing power of the entire network. In front of profit-seeking miners, in addition to mining revenue and price, transaction depth is also a key consideration for them, especially large-scale miners; otherwise, the mined coins have no rivals in the exchange, and mining is useless. on the other hand. For miners who purchased AMD graphics cards (high efficiency and low cost but difficult to transform) and Antminer E3 mining machines (focused on the Ethash algorithm), the switchable currency is very limited; the same origin as ETH and the difficulty bomb has been removed ETC is also a more suitable choice for them.
Note: It is written in ECIP-1017 that under the model of ETC, the block reward will be reduced by 20% every 5 million blocks
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(picture cut from: github.com/ethereumproject)
