Eight out of 10 Ethereum miners appear to have gone offline after The Merge, according to data from 2miners, a website tracking the hash rate of Proof of Work networks.
Data shows that many miners are opting to turn off their hardware after soaring hash rates rendered many networks supporting EtHash miners unprofitable.
Mining at a Loss
“I’m mining at a loss,” TheCrowbill, an Ethereum Classic miner, told The Defiant on Sept. 27. “Probably will remain that way for some time.”
Ethereum’s chain-merge on Sept. 15 dropped Proof of Work miners from the network in favor of Proof of Stake validators. The move reduced Ethereum’s energy consumption by 99.8% and prompted miners to unplug an estimated $5B worth of mining hardware.
Ethereum Classic and the newly forked ETHW chain promised to take on a large number of Ethereum’s former miners. But questions arose as to whether the networks could support a large influx of hash rate without their miners being forced to operate at a loss.
The hash rate of Ethereum Classic, which was tipped to be the top refuge for Ethereum miners, is down 47.6% since peaking near 307 terahashes per second (TH/s) on the day of The Merge, according to 2miners. Ethereum Classic’s ETC token has skidded 4.7% in the last seven days compared to a 0.5% uptick for Ethereum, according to CoinGecko data.
Despite the pull-back, the network’s hash rate is still up 52% compared to when The Defiant last spoke to Ethereum Classic miners and reported EtHash miners could expect negative profits for validating the chain.
With $4B in market cap, Ethereum Classic is the third-ranked Proof of Work network behind Bitcoin and Dogecoin — neither of which can support EtHash mining hardware.
Ergo was the chain that enjoyed the second greatest influx of hashing power after The Merge behind Ethereum Classic, with its hash rate spiking 590% to 234 TH/s on merge-day. But, no surprise, the chain’s profitability plummeted, driving most of its newly accumulated hash rate to abandon the chain.
Ergo’s hash rate is now just 25.9 TH/s, its lowest level since Sept. 13. Ergo is the 19th-ranked PoW network by market cap with $161M.
ETHW, the Proof of Work Ethereum fork launched by miners on Sept. 16 is also failing to be a refuge for Ethereum miners. Its hash rate immediately spiked to 79.4 TH/s, but then grinded down to a local low below 28 TH/s on Sept. 23.
While its hash rate has since picked up to 45 TH/s, the network still appears ill-suited to support Ethereum’s miners. It generates $144,500 worth of rewards daily.
Although the network is host to just 5% of the hash rate on Ethereum prior to The Merge, mining rewards are equal to only 0.7% of those issued by Ethereum before The Merge — suggesting an 86% drop in revenue.
ETHW is the seventh-largest PoW network by market cap with $1.2B.
Ravencoin is the only Proof of Work network supporting EtHash to retain its post-merge, probably due to the network’s rewards adjusting as its hash rate increases and decreases.
“RVN has a smooth difficulty adjustment, so it did handle the influx just fine,” Tron Black, the president of the Ravencoin Foundation told The Defiant. Black added that the network’s difficulty adjusts every minute.
Ravencoin’s hash rate is now 16.8 TH/s after pulling back about a quarter from its post-merge high. Ravencoin is the 10th ranked PoW network with a $444.4M market cap.