What uncertainties does ETH2.0 bring to mining?
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Miners increase income
On November 23, the price of ETH broke through $600, setting a new high since June 2018. The most direct impact of the skyrocketing currency price on miners is to increase their income.
According to the data of Crypto Fees, the 7-day average fee for the entire network of Ethereum is about 3 million US dollars. Bitinfocharts shows that the fee for Ethereum accounts for about 25% of the income of miners, that is to say, within an average day , the total income of Ethereum miners can reach 80 million RMB.
This year can be said to be about the bull market of Ethereum. DeFi liquidity mining and ETH2.0 are linked. Miners first earn a lot of money in gas fees, and then the price of ETH skyrocketed. The ETH dug out can be exchanged for more fiat currency .
Thanks to the expected rise in ETH prices, the decline in the payback period of mining machines, the extremely low shutdown price of Ethereum mining, and the high residual value of graphics cards, retail investors or institutions continue to enter the market to participate in ETH mining.
Leibit mining pool has vigorously deployed ETH mining since this year. Jiang Zhuoer, the founder of Leibit Mining Pool, once predicted that "the market value of Ethereum may exceed that of Bitcoin", because he is optimistic about the development potential of Ethereum, the mining pool has purchased a lot of Ethereum mining machines this year, and the price of ETH is 400 US dollars At that time, the static payback cycle of these mining machines was more than 400 days. When the price reached about 600 US dollars, the payback cycle had dropped to about 260 days.
It is precisely because the DeFi mining boom has given miners an obvious profit signal, so this time, miners entered the mining site and miners deployed mining machines before the currency price rose. Beep News learned that thanks to the increase in production capacity, mining machines on the market are not as scarce as before, but the price of mining machines is still skyrocketing.
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The total network computing power of Ethereum, information source: Bitinfocharts
Mining is profitable, and upstream mining machine manufacturers are also taking action. In August of this year, Beep News learned from Wang Shenglin, the sales director of Innosilicon, that Innosilicon’s machines had been raised by about 400 RMB at that time. Wang Shenglin told Beep News that “the possibility of a further increase in the price of mining machines is not ruled out.” .
Jiang Zhuoer told Beep News that the price of mining machines is rising. The price of a machine in early October was more than 18,000 RMB, and now it has risen to more than 20,000 RMB, an increase of more than 10%. According to Beep News, perhaps because of the attraction of high returns, the original Bitcoin mining machine manufacturers are also developing Ethereum mining machines.
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Uncertainty brought by ETH2.0
Regarding the impact of the upgrade of Ethereum from 1.0 to 2.0 and the change of the consensus mechanism from PoW to PoS, the majority of miners and mining farms believe that there is no impact. They generally believe that there is still a lot of time left for miners.
In the perception of miners, the upgrade of Ethereum from 1.0 to 2.0 is a very slow process. Each stage takes time to develop, test, and update online. In addition, Ethereum 1.0 carries a lot of users, applications, and funds. , so the overall migration will be very cautious and slow.
There are still too many variables before ETH2.0. For miners, it is not meaningful to think about the countermeasures now, so we can see that miners are generally "waiting" now, and everything is still the status quo. Continue to lock in, the price continues to rise, the computing power continues to increase, and the miners continue to mine.”
But in fact, behind the calm, the progress of ETH2.0 is still having an impact on the miner community.
On November 4th, the ETH2.0 deposit contract was launched, which is the first step in the transformation of the consensus mechanism from PoW to PoS;
On November 24, the balance of the deposit contract address reaches the minimum activation requirements, and ETH2.0 Creation will be officially launched on December 1;
On November 18, the ETH2.0 research team stated at the fifth AMA that the ETH2.0 roadmap has changed, and ETH2.0 will change from the original "sharded execution system" to "PoS beacon chain verification execution + data Fragmentation".
A Jian, an Ethereum enthusiast, pointed out in a recent article that because the verification of shard transactions is difficult to be as simple as the verification of block headers, and the transactions in different shards are difficult to be independent of each other, the verification cannot be completely parallelized. , so the original route of ETH2.0 is difficult to realize; while in the new roadmap, the scalability brought by data sharding is not strong, "the scalability advantage of the new roadmap is not enough to make Ethereum venture into PoS."
That is to say, the original roadmap of ETH2.0 is difficult to implement, and the Ethereum team has compromised, while the new plan is not satisfactory. Whether the vision of ETH2.0 can be realized is facing a relatively large challenge.
Although there is such a joke circulating in the market, "If ETH2.0 succeeds, the currency price will skyrocket, and the miners will pay back their capital in advance; if it fails, 1.0 will continue to mine. No matter what, the miners will be invincible." The "escape" of the Fang system to a higher dimension really failed, and the whole system was trapped in the quagmire of low performance, and the currency price will be greatly impacted, which in turn will affect the income of miners.
In addition, in the transition from ETH1.0 to 2.0, the Ethereum team also wants to advance the EIP-1559 proposal. The Ethereum team mentioned in the fifth AMA that "EIP-1559 is part of the fee market for sharded data in the ETH2.0 specification."
The EIP-1599 proposal mainly involves two changes: one is the dynamic adjustment of the block size, so as to alleviate the problem that sometimes the block is too full, the transaction needs to wait for packaging, and sometimes the block is too empty.
The second is to divide the transaction fee into two parts, one part is the basic fee. In a block, the basic fee is fixed, but the basic fee of each block will be adjusted according to the congestion of the network. It is worth noting that the basic fee will be destroyed and the miners cannot get it; the second part is the tip from the user to the miner.
It can be seen that after the Ethereum network transaction fee is divided into two parts, the basic fee and the tip, although the Ethereum network can capture the transaction value on the chain (the more activities on the chain, the more the basic fee is destroyed, the less the ETH circulation, the ETH The more value-added), but in fact the transaction fee income of miners will be reduced, which is equivalent to sharing part of the transaction fees originally allocated to miners to all ecological participants.
Whether EIP-1559 will have an impact on miners, different miners have different opinions. A miner told Beep News that the proportion of transaction fees in miners’ income hovers at 2-3% in most cases, so the impact on miners is not great.
However, some miners believe that events like DeFi liquidity mining mean huge gas income for miners, which is "a pity to discard", and the advancement of ETH2.0 may mean the arrival of EIP-1559.
In addition, as reported by Blocklike, miners may have disagreements on ETH2.0. Du Chao, the founder of Byte Chain, believes that "when it is time to switch from the beacon chain to 2.0, the miners will not agree. They will continue to work on ETH2.0." Mining on 1.0. Although the miners know about these plans, they don’t fully agree with them, but the Ethereum community doesn’t pay much attention to the miners, and the miners don’t have much say.”
As mentioned above, if Ethereum migrates from 1.0 to 2.0, if the migration is not good, the gains may outweigh the losses. Many participants in the community think that ETH2. , Grin, Beam, CKB, RVN, XMR, BTG, AION and other currencies, these projects are eyeing the ETH computing power that may withdraw.
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Source of information: Weibo
In addition, according to the information learned by Beep News, if miners really withdraw from the Ethereum ecosystem, some miners may choose to sell their mining machines. General-purpose graphics card mining machines can provide miners with 20-30% residual value.
The Ethereum network is trying to verify new solutions for decentralization, security, and scalability. The entire community is on an unknown road. How will it develop in the future? How will ecological participants, including miners, choose? It will take time to give an answer, but what is certain is that no matter how ETH2.0 develops, the market will always make the most sensible decision.
Reference article:
Reference article:
"Viewpoint | Should Ethereum's roadmap change? 》by Ethereum Enthusiasts
"Consensus differences, the voice of the ETH2.0 community, token holders "can't hear"" by Blocklike
