Mining infrastructure companies Hive Blockchain and Hut 8 Mining Corp. today released notices that detail how their businesses plan to pivot away from Ethereum mining.
As the mid-September window for the Ethereum merge draws closer, the final days of proof-of-work mining on Ethereum are here. The merge upgrade will transition Ethereum to a proof-of-stake system, which is forcing miners to rethink their business models.
Hive, a publicly traded company, plans to explore other blockchains to continue its mining operations. Hut 8 Mining, another major miner, will meanwhile pursue ventures outside of crypto.
New bees in the hive
Proof of work uses high-powered computers to solve complex algorithms, requiring great amounts of energy. On the other hand, proof-of-stake validates transactions through network users who have a large amount of the blockchain’s native token staked.
Computer hardware manufacturing company Hive Blockchain says it has analyzed alternative tokens that are mineable with its graphics processing units (GPU). Hive aims to use its “6.5 Terahash of Ethereum mining capacity in the event of Ethereum’s transition to Proof of Stake across various other GPU mineable coins.”
Hive’s processing power produces significant results for the company. During August alone, Hive Blockchain’s GPUs yielded a total production of 3,010 ETH. This equates to about 97 ETH (or more than $150,000) per day.
#Ethereum miners generated $733 million in revenue in August 2022. What will they do in October 2022 after the #merge? Where will the mining power go? Which PoW blockchain will benefit the most?
— Monty Metzger (@montymetzger) September 5, 2022
IT services and consulting group Hut 8 Mining Corp., meanwhile, will be going in a different direction. Hut 8 recently installed more GPUs at their Canadian mining facility and will pivot away from mining.
The elimination of proof of work has brought the need for new opportunities for the computing giant. The company says it will focus on machine learning, artificial intelligence, and providing alternative services to its customers.
Hut 8 Mining formed a partnership with Zenlayer in August to bring the cloud service provider to Canada. Zenlayer’s edge cloud platform will be used by Hut 8 Mining to run applications for customers more efficiently.
No more miners?
In July, Decrypt took a look at the future of Ethereum mining and how mining pools may soon be a thing of the past. Ethereum mining pools may be shifting, just as the consensus mechanism will.
With ETH mining pools on the brink of obscurity, staking pools may be the next new wave of validation and community effort. Staking pools combine the resources of stakeholders to increase the chance of reward through network validation.
As for the individual miners currently profiting from ETH rewards, there is simply no easy answer for their future.
The merge makes Ethereum one of the first blockchains to convert from proof-of-work validation to proof of stake for more energy efficiency and further adds to the uncertainty in the future of mining. Miners who reaped the benefits from proof of work will likely be sidelined by the switch.
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