Ethereum mining reshuffle: Nearly 40% of the total network computing power may evaporate in April

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At Ethereum block height 9,840,000 (around April 9th), the popular Antminer E3 ASIC miners would fail due to the increased size of the Ethereum DAG file. According to a recent study conducted by Kristy-Leigh Minehan, it is estimated that nearly 40% of Ethereum’s computing power may come from E3 mining machines. The exact numbers are subject to some change and we won't know until the event actually happens, but for the purposes of this article, let's stay on the topic.

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what happens?

There are a few important things to understand before analyzing the impact of the drop in hashrate, I recommend you take a look at the Ethereum mining page on EthHub. The most important thing is that Ethereum will have a difficulty measure, which determines how difficult it is to mine a block on the network. This adjustment occurs as the hash rate rises and falls, and attempts to keep block times within a certain range.

1. With a 40% drop in hashrate, the mining difficulty would drop to bring block times back to the 13 seconds we're used to. This will take a while, although I'm not sure how long the adjustment will take, so let's take 30 minutes as an estimate.

2. However, as ASIC miners exit the Ethereum network, previously unprofitable GPU miners will enter the network in their place. It's hard to estimate how much the lost hashpower will be filled, but it should be a decent amount.

3. To summarize the possible scenarios:

4. The computing power of the entire network of Ethereum dropped from 181.8 TH/s to 109.08 TH/s;

5. Difficulty begins to decrease;

Difficulty starts to rise again;

Block time back to about 13 seconds;

I think it's important to note that this can all happen basically in a split second. Nothing prevents GPU miners from entering the network at block 9840000.

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Is the Ethereum network at risk?

Question 1: What will the sudden drop in computing power bring?

One problem with hashrate dips is that malicious actors can come into this window (30 minutes?) and attack the network before the difficulty has fully adjusted. The easiest possible way for this to happen is by renting computing power.

I don't know much about hashrate renting, but there is a handy website that shows us the current cost of a 51% attack on any network.

At present, the cost of continuously attacking the Ethereum network for 24 hours is about 110,000 US dollars. If we assume the worst case: 40% computing power drops sharply, no more GPU mining machines enter the network, and it takes 1 hour Adjusted, then the cost of attacking during this 1 hour drops to $66,000.

As a comparison, the cost of attacking the network at the beginning of 2019 when the computing power of the entire network is reduced is about 80,000 US dollars.

It should be noted that the above cost calculations all assume that you can obtain enough computing power. But the actual situation is that the computing power that can be leased on nicehash currently only accounts for about 4% of the total network computing power.

Question 2: Will other ASIC miners fill the void?

To me, there is a risk that is difficult to quantify and understand.

Has this happened before?

Ethereum has also experienced a sharp drop in computing power, although the drop did not occur in a short period of time.

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2. What should we do?

3. The above content is just a collection of different arguments that I have seen. And what follows is my opinion.

This sudden drop in computing power has nothing to do with me. In fact, I find that the slow and continuous drop in computing power is more worthy of attention. The reason is that it would give malicious actors more time (say weeks) to coordinate an attack. And the window period of this incident is very short, although it is known, I don't know what would motivate people to do the attack at that moment, in fact, in the past 18 months, the computing power has dropped and the rewards have been cut In the case of , the attack is easier to implement. Even in the worst case scenario where no other miners join the network immediately, we are only talking about a $12k difference compared to early 2019. To me, if someone wants to 51% attack Ethereum, it doesn't really make much difference whether the event happens or not.

I don't know where this computing power comes from, one of the reasons we don't see 51% attacks is game theory. Is there any point in burning your invested (ETH) to attack the blockchain for 1 hour? So far, the answer appears to be no. We also just went through the lengthy ProgPoW debate where one side kept saying that GPU miners would not attack the Ethereum blockchain. Since most computing power is not rentable, and ASIC mining machines are stripped off the network, where does this attack computing power come from?