“Life after death”: Ethereum miners put their hopes in a new altcoin

The long-awaited The Merge update to the Ethereum blockchain is scheduled for release in September and will involve a transition to the PoS consensus algorithm. Once the upgrade is implemented, mining (PoW) will be replaced by the process of transaction verification by stackers (PoS).

A major Chinese miner calls for sabotaging the switch to PoS and prepares to launch an alternative network, ETHPoW.

What’s the bottom line?

It is expected that after numerous delays, promises and reschedules, the transition of the Ethereum network to the Proof of Stake (PoS) consensus mechanism could take place in the second half of September. At least one of Ethereum’s key developers, Tim Beiko, has named a possible date of September 19, 2022.

While part of the cryptocurrency community is looking forward to abandoning the Proof-of-Work (PoW) model and transforming the Ethereum network to version 2.0 using the Proof-of-Stake (PoS) model, another part strongly discourages such a transformation.

PoW miners understand that expensive Ether mining equipment will become unnecessary. After the transition, their income will instantly drop to zero, and they will be completely excluded from the Ethereum ecosystem.

After months of debate and attempts to oppose the future Etherium merger, crypto investor and one of the biggest players in China’s mining ecosystem, Chandler Guo, announced that he plans to continue mining in the Ethereum PoW chain and is preparing a new network hardfork with a transition to the new ETHPoW blockchain.

Chinese miners currently have three different opinions on Ethereum’s switch to POS.
1, @BITMAINtech supports ETC
2 @ChandlerGuo leads the discussion on forking POW ETH
3 @BixinWallet expressed support for other POWs such as kadena starcoin aleo ckb and conflux.

— Wu Blockchain (@WuBlockchain) July 29, 2022

He previously participated in the Ethereum Classic fork, so he has all the necessary experience. Many miners supported Chandler Guo because they saw in his decision the possibility of “life after death.”

Analysis from Bitmex

ETHPoW is challenging the upcoming fork, so BitMEX analysts examined the technical possibility of splitting the Etherium network after the merger procedure, as well as the viability of the new ETHPoW blockchain. According to their report, the solution is quite workable and capable of “providing an exciting opportunity for traders and speculators in the short to medium term.”

However, BitMEX points out to the community that the ETHPoW blockchain is “almost guaranteed to be a minority network, both in terms of the coin’s price and its economic potential.”

A poll on the future of ETH

According to a survey by crypto fund Galois Capital, 53.7% of respondents believe that the transition to PoS will proceed without any problems. However, almost a third, in the form of 33.1% of survey participants, believe that the Ethereum blockchain will split into two blockchains — based on the current PoW consensus algorithm (ETHPoW or ETH1) and based on the new PoS.

Another 13.2% expect the appearance of three different blockchains, one of which will allegedly be a blockchain with a “complexity bomb” that suggests a gradual increase in the complexity of ETH mining. 

As we can see, in total, about half of the respondents believe that the fork will take place with the formation of an alternative cryptocurrency.