Ethereum Merge prompts miners and mining pools to make a choice

The Ethereum blockchain is all set to make its highly anticipated transition from its current proof-of-work (PoW) mining consensus to proof-of-stake (PoS). The Merge date is officially scheduled for Sept. 15–16 after the successful final Goerli testnet integration to the Beacon Chain on Aug. 11.

At present, miners can create new Ether (ETH) by pledging a huge amount of computing power. After the Merge, however, network participants, known as validators, will be required to instead pledge large amounts of pre-existing ETH to validate blocks, creating more ETH and earning staking rewards.

The three-phase transition process began on Dec. 1, 2020, with the launch of the Beacon Chain. Phase 0 of the process marked the beginning of the PoS transition, where validators started staking their ETH for the first time. However, Phase 0 didn’t impact the Ethereum mainnet.

The terminal total difficulty has been set to 58750000000000000000000.

This means the ethereum PoW network now has a (roughly) fixed number of hashes left to mine.https://t.co/3um744WkxZ predicts the merge will happen around Sep 15, though the exact date depends on hashrate. pic.twitter.com/9YnloTWSi1

— vitalik.eth (@VitalikButerin) August 12, 2022

Phase 1, the integration of the Beacon Chain with the current Ethereum mainnet was scheduled for mid-2021; however, due to several delays and unfinished work on the developer’s end, it got postponed to early 2022. Phase 1 is all set for completion in the third quarter of 2022 with the Merge. This phase would eliminate PoW-based miners from the ecosystem and make many current PoW-based projects redundant.

Phase 2 and the final phase of the transition would see the integration of Ethereum WebAssembly or eWASM and introduce other key scalability features, such as sharding, which developers and co-founder Vitalik Buterin believe would help Ethereum achieve processing speeds on par with centralized payment processors.

In anticipation of the Merge, there has been active chatter about what would happen to the PoW chain after the mainnet transitions to PoS. Many centralized exchanges have thrown their support behind the Merge but have stated that if PoW-based chains gain traction from miners, then exchanges will list the forked chain and support them.

Weighing in the possibility of a successful hard fork

Chandler Guo, an influential Bitcoin (BTC) miner, was among the first to bring out a case for the PoW Ethereum chain post-Merge. In a tweet on July 28, Guo shared a screenshot of Chinese miners saying that PoW Ethereum is coming soon.

ethpow will coming soon pic.twitter.com/v9eAbWO2BZ

— Chandler Guo (@ChandlerGuo) July 27, 2022

However, Buterin has denounced those who advocate for this forking, claiming that it would just be a ploy for miners to make easy money without benefiting humanity. Perhaps most importantly, it seems that much of the decentralized finance (DeFi) ecosystem has no intention of supporting Ethereum PoW, which is reason enough for Ethereum advocates to take a conservative approach to the Merge.

Shane Molidor, CEO of crypto exchange platform AscendEX, believes there is a definite chance of forks, with PoW miners already showing interest, telling Cointelegraph:

“Some Ethereum miners may believe it’s in their best interest to fork the newly PoS Ethereum chain back to PoW in order to keep using their expensive mining hardware. If this were to occur, ETH holders would likely be airdropped ‘PoW ETH’ in addition to their original ETH holdings that merged to PoS.”

He added that if a fork does not occur, it is likely that other PoW chains such as “Ethereum Classic and GPU-hungry applications like Render Network gain hash power from ex-PoW Ethereum miners.”

Daniel Dizon, CEO of noncustodial liquid ETH staking protocol Swell Network, believes the opposite and sees a very small chance of a successful fork. He explained to Cointelegraph that even if miners manage to fork the PoW chain and keep it alive, there is very…