The Ethereum 2.0 beacon chain is launched, is it still a good time to buy a graphics card for mining?

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This year, there is more room for the game of Ethereum mining revenue

This year, the mining enthusiasm of Ethereum is significantly higher than that of Bitcoin. Since the beginning of the year, the computing power of Ethereum has increased by more than 80%, far exceeding the increase in computing power of Bitcoin. The main reason is the DeFi market in August, which stimulated a strong rebound in ETH prices.

At present, affordable graphics cards have reached the point where one card is hard to find. According to IT House’s news on November 15, although Nvidia’s new generation of RTX 30 series graphics cards have been released, most platforms are out of stock or at a high premium. ASUS UK once stated on its official Twitter that it would complete the delivery of the graphics card as soon as possible, and advised buyers to contact the supplier directly.

Some foreign netizens also posted an apology email from GeForce, saying that the RTX 3070 they ordered in October was in high demand, so it could not be delivered as scheduled, and it is expected to be out of the warehouse on November 20 or later.

Although manufacturers have announced that they will continue to increase production capacity, it is expected that it will be difficult to alleviate supply and demand in the short term when currency prices are skyrocketing. The backlog of graphics card orders may be shipped after December. We also learned that Innosilicon’s new A10 Pro futures will also be issued in December-January. Therefore, it is expected that after December, the computing power of Ethereum will continue to usher in explosive growth.

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The probability of ETH double-chain merger will not be earlier than the end of 2021

The ETH 2.0 research team revealed in the latest AMA event in November that at present, the research work on data sharding and merging has been completed, leaving only engineering development and coordination issues. At the same time, light clients, merging and sharding will Parallel development, this parallelization of work means that the double-chain merger may come earlier.

However, for developers, the coordination of the merger will be difficult due to the ever-proliferating ETH1. Therefore, Vitalik believes that we will not see a mature test version until the end of 2021 for merging and sharding. This means that we are unlikely to see an official merger of ETH1 and ETH2 until at least 2022.

According to the official document, after phase 0 (PoS) is opened, there will be two active Ethereum chains, users can send ETH from ETH1 (PoW main chain) to ETH2 (beacon chain), but they can no longer transfer ETH back to ETH1 . On December 1st, the beacon chain of phase 0 was officially launched.

In phase 1, data sharding allows transactions to run in parallel, which will become the key to improving the scalability of Ethereum in the future. At this time, the ETH1 chain and ETH2 chain will still run in parallel. Phase 2 is the stage where the functions of the entire system begin to integrate. The shard chain transitions from a simple data container to a structured chain state, and smart contracts will be reintroduced. And the merger of ETH1 and ETH2 will happen in the middle phase 1.5.

ETH1 (PoW chain) will remain active while testing and transition takes place on ETH2 (PoS chain) until a clean merger. This means that ETH rewards on the network will be paid to both Ethereum 2.0 validators and PoW miners. Therefore, the total inflation rate of the two chains may initially spike, but eventually trend towards 0-1%.

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Problems faced by PoW miners in the later stage

According to the current market quotation, start with 6-card 3080, and the cost of assembling the machine is more than 40,000. Calculated by the static computing power when the currency price = 600 US dollars, the payback time is less than 8 months. Whether it is selling coins while digging, or accumulating coins to sell at a high point, considering the rising trend, the computing power lags behind the increase in currency prices and the high residual value of graphics cards, the real payback cycle of miners may be much shorter than the current static Forecast value, that is, it can pay back before the middle of 21 years. Then the double-chain merger that can only happen at the end of 21 or even 22 years will not have much impact on the current miners, and may even obtain excess returns. Because before the merger, Ethereum may have no new computing power, but the currency price has skyrocketed.

However, for some graphics cards or branded mining machines that can only be delivered after the Spring Festival, the uncertainty of the cost return and income will increase, because the cost return time may be later than the merger.

As mentioned earlier, the current parallel development of Ethereum may cause the merger to happen sooner than expected. If ETH breaks through the previous high of $1,440, the value of locked ETH is expected to exceed $1 billion or more. The timing of the merger is related to the release of this part of pledged user funds. Driven by financial interests, developers may be more motivated to merge ahead of time.

In addition, there is a saying that once ETH is completely converted to PoS, the original miners' computing power can be transferred to other small currencies, continue to mine graphics cards, and eventually drive small coins to skyrocket. However, there are two problems with this view:

1. At the moment when cryptocurrency investors are becoming more rational, will some small coins with little practical value really appreciate in value just because of the switching of miners’ computing power?

2. If small coins undertake the huge amount of computing power cut from ETH, after the miners' income is diluted, they may speed up mining, selling and withdrawing, and cause the price of small coins to continue to fall. For example, the market value of ETC, the largest graphics card mining currency other than ETH, is only 700 million US dollars, and there are frequent negative news about 51% attacks. Its market value and fundamentals are not enough to support strong selling pressure.

It can be said that the computing power brought about by the merger of ETH1 and ETH2 has switched to small coins. For these PoW coins, the ending is not necessarily optimistic, and may even be catastrophic. Therefore, it may not be realistic to continue to use graphics card mining after the fantasy dual-chain merger.

In any case, all assumptions about miners’ return to capital are based on the continued optimism of the market next year. In this process, it is presumed that the currency price and computing power will go through many games, and finally reach a certain degree of income balance. (Contributing author: miaohash Editor: Wu Shuo Blockchain)

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