Mining Options After Ethereum’s Transition To Proof of Stake
While ETH transitions to a new PoS consensus, miners can also move to a new layer that doesn’t require any consensus.
Proof of Stake is Coming Very Soon to Ethereum
Ethereum miners will soon have to deal with the end of an era when Ethereum moves from Proof of Work (PoW) to Proof of Stake (PoS). The move has been rumored for years, but one of Ethereum’s core developers has confirmed the move will happen by late summer 2022:
Late summer 2022 will therefore reach a crescendo as far as the last days of being able to mine Ethereum. The timing will also coincide with the hottest time of the year as it’s a challenge to cool GPUs in mining rigs with the ambient heat reaching its peak.
What Are the Consequences for ETH Miners?
For miners with GPU rigs, there won’t be many alternatives that will make their hardware and electricity costs worth their while. If there were, they’d already be mining there. Ethereum could absorb a lot of hashrate t, something smaller projects can’t offer and would see their rewards plummet if too many fleeing miners jump on board their networks.
We should start to see older GPUs being dumped on the marketplace as Ethereum completes its transition to the PoS consensus which will no longer need high-powered GPUs. We’re already seeing the price of GPUs finally starting to drop to sane price levels:
Hashrate has been steadily increasing in the Ethereum network steadily since 2016 and explosively in the past couple years:
But if GPU prices are a leading indicator, we should see Ethereum’s global hashrate decrease in the months ahead.
Is PoS the Only Option for ETH Miners Going Forward?
Ethereum makes up over 95% of all GPU mining income right now. Although there are technically alternative PoW coins to be mined, just imagine the hundreds of thousands of GPUs that’ll be jumping onto other coins in the coming months. You can imagine what this would do to the hashrate and therefore the profitability of mining that coin.
Miners who wish to stay in the ETH ecosystem can of course stake instead of mine. The new PoS consensus mechanism is a fairly straightforward value proposition for stakers. Validators will stake ETH and are chosen at random to validate new blocks. The larger amount of ETH a user has to stake, the more validator rewards they’ll get. But many miners aren’t ETH whales so likely will receive scant rewards in the new PoS setup.
An Alternative for ETH Miners: the TEA Project
Instead of searching for a new ecosystem with PoW consensus, ETH miners can stay put by mining on TEA Project’s layer-2. The TEA layer-2 will run on top of a number of different chains (including Ethereum).
The TEA Project uses traditional mining hardware that miners are used to but there’s no arms race as far as GPUs and RAM requirements. Miners will only need an RPi with inexpensive TPM and GPS modules to mine on the TEA network. Additionally, our layer-2 doesn’t use traditional consensus, so TEA network mining machines won’t waste energy solving difficult consensus-related math problems.
Because the TEA Project is currently in testnet, miners will need to strategize a long-term plan for profitability. Here’s a sample plan for ETH miners looking for what’s next after the PoS switch over:
1. Sell your GPUs on the secondary marketplace (eBay, Facebook Marketplace).
The best time for miners to sell their GPUs was yesterday and will continue to be until Ethereum’s move to PoS becomes official. At that point in late summer 2022, expect to see a glut of graphics cards get dumped onto the market as miners look to recoup some of their capital costs.
According to Mark D’Aria, CEO of Bitpro Consulting (a retailer of used GPUs), “Since the beginning of the year [2022], on average, people are losing more money net, even after what they mine. Anyone who’s been holding on to GPU has made a mistake. They should have sold January 1.”
2. Sign up for the TEA Project’s testnet mining competition
This is the best time to get involved with the TEA Project as we’re just beginning to deploy our layer-2 to various blockchains as we gear up for our mainnet launch. Here’s a few instructional guides for getting started mining on the TEA network:
3. Practice getting used to TEA Project concepts.
There are many new concepts to learn in the TEA Project like protected enclaves within mining nodes, bonding curves, and the TEA Project’s layer-2 TApps. Participating in our mining competitions gives users time to learn these concepts as they get better at mining and investing in the platform.
4. Compete in the contest and either earn USDT or mainnet TEA tokens.
Once you’ve started earning revenue in the competition, it’s time to reap the rewards. You’ll earn contest TEA during the competition which can either be cashed out to USDT or exchanged for mainnet TEA tokens.
Here’s an overview of our latest epoch 9 mining contest written for a prospective investor looking to do well in the contest:
If you have any questions, be sure to ask in our Telegram group: https://t.me/teaprojectorg
