For those miners who depended on ETH hashing for passive revenue, the Ethereum (ETH-USD) Merge was the worst thing that could have happened. The formerly successful business has lost relevance as Ethereum switches to proof-of-stake. These miners are now left with mountains of useless equipment. Or, is it really not that useless? These miners really have a new use case to fall back on, as several experts have noted.
The network's departure from proof-of-work, which has been its consensus mechanism since 2015, is one of the key narratives arising from the Merge. With it, transactions can only be verified and completed after a number of challenging cryptographic challenges have been solved. These riddles can only be solved by machines with strong processing capabilities. Computers are working to solve these challenges as a result of crypto mining itself.
Anyone with the capacity to earn money has found this to be an enticing method. All that is required is to purchase a mining gear. Naturally, these amateur miners also face competition from enormous crypto mining farms run by businesses, who employ hundreds of rigs. Significant criticism has also been leveled at the consensus process itself. Proof-of-work is cited by opponents of cryptocurrencies as a significant energy drain that many believe is wholly unneeded for the market.
Ethereum can run on a far more energy-efficient system by switching to proof-of-stake. This satisfies those who care about the environment while also being significantly quicker and less expensive than proof-of-work.
But it leaves a lot of miners behind. What will happen to all of the Ethereum mining equipment in existence? Without a doubt, they should have a new use, lest they all become electronic junk. Actually, there could be a remedy for this hardware in a different expanding sector.
The Ethereum merger makes cloud computing accessible to thousands of miners
The Ethereum Merge may have temporarily hindered miners by pulling gear out of service. However, another cloud computing use case is on the horizon. It may be equally profitable and save a ton of electrical garbage from ending up in landfills.
According to Protocol, the Merge will generate a lot of garbage if miners are unable to reuse their equipment. Additionally, just 20% of all electronic garbage is really recycled, according to the publication. In contrast to Bitcoin (BTC-USD) mining rigs, analysts contend that ETH miners may make clever use of their equipment in various ways.
The process of blockchain validation is quite similar to cloud computing. Similar to how websites and other businesses outsource site hosting and web services to cloud computing providers, blockchain players outsource cryptographic hashing to these miners. This makes it possible for ETH miners to continue using their pricey gear even after the Merge.
One of the businesses launching ETH mining-turned-cloud computing farms is Hive Blockchain Technologies (NASDAQ:HIVE). The business claims that it would use its 38,000 Ethereum mining GPUs to provide customized online services to new customers. With its 180 machines, Hut 8 Mining (NASDAQ:HUT) claims it will concentrate on machine learning and applications of artificial intelligence (AI).
However, there is also a market for used Ethereum mining equipment. This is due to the fact that personal computers share visual hardware. However, investors will be less inclined to purchase a mining system that has been operating round-the-clock given that the CHIPS Act is anticipated to drive down inflated GPU costs. However, experts are pointing up several more uses for these devices, which should provide some comfort to investors concerned about the potential effects of post-Merge waste.
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