The historic Ethereum merge is undoubtedly the most discussed and hottest event in the crypto space throughout September. The day of the merge on September 15 alone witnessed nearly 700,000 relevant tweets. Fortune even published the topic page of "Ethereum Merge" and pinned the tweet to the top.
However, in stark contrast to the lively atmosphere in the Ethereum community, Ethereum miners were forced to quit. After Ethereum officially switched to the PoS consensus mechanism, massive computing power became useless, and miners urgently needed a new destination. As a long-existing public chain, Ethereum Classic has become the best alternative at present. According to data, Ethereum Classic received nearly 30% of the original Ethereum computing power on the day of the merge, which directly sent the ETC computing power soaring to a record high of 300 TH/s. At the same time, the difficulty of the whole network has skyrocketed by more than three times, from 1.1P to 3.34P.
The increase in difficulty has reduced the number of coins mined by miners during the same period of time. Now the declining price of ETC has also made some newcomers who want to try GPU mining undecided. Against this backdrop, is ETC still worth mining?
First of all, one should know that mining is a long-term investment, because in most cases, it takes a year or even a few years before miners could recover the funds they’ve invested in mining machines. The payback could be longer once the coins mined plummet. For miners to make a profit, therefore, the key lies in the project they choose.
The origin of Ethereum Classic
ETC has the same origin as ETH. In June 2016, The DAO, the hit project at that time, was attacked by hackers. Most members of the Ethereum community headed by the founder Vitalik Buterin proposed a hard fork to roll back the transactions and recover the losses of most users. However, as a few miners believed such a rollback violated the immutability of the blockchain as they originally aspired to, they kept mining on the original chain, and the coin mined there is what we call ETC today. Considering the same origin shared by the two chains, Ethereum miners tend to relocate their computing power to ETC.
As the founder Vitalik Buterin responded at the Ethereum Community Conference (EthCC), he would not stop shifting Ethereum to PoS, and suggested that miners who love PoW mining turn to ETC.
Mining Principles of Ethereum Classic
Like Bitcoin, Ethereum Classic also follows PoW (Proof of Work). Yet there are two differences: firstly, the ETC rewards for Ethereum Classic miners come from three sources, namely the basic blocks, uncle blocks, and gas fees; secondly, the total supply of ETC stands at about 210,700,00 coins, approximately 10 times that of BTC.
In addition, Ethereum Classic also sets the block time at about 15 seconds, and stipulates that the block reward will be reduced by 20% for every 5,000,000 blocks (according to ViaWallet, the current block reward is 2.56 ETC). Same as Bitcoin’s halving every 210,000 blocks, such a mechanism aims to reduce circulation and control inflation.
Source: https://explorer.viawallet.com/halving/
Current Ecosystem of Ethereum Classic
Although Ethereum Classic seems to be a good choice for Ethereum miners at the moment, as a large number of miners migrate to the ETC network, there will be some problems:
To begin with, according to the data on the DeFi Llama website, there are only five DeFi projects in the Ethereum Classic ecosystem at present, and the TVL is less than $700,000, scarcely one ten-thousandth of Ethereum’s figure. Such a negligible scale largely restricts the room for the Ethereum Classic ecosystem and the ETC price to grow.
Without price hikes, miners would lose the motivation to mine. As the price keeps falling and difficulty climbs, mining would become profitless, and some miners may quit or shut down their mining machines. As the computing power and price of ETC indicate, the market is undergoing a “cooling-off period” after a boom.
Fortunately, well-known institutions have started to empower the ETC ecosystem. For example, Bitrise Capital announced the launch of a $10 million ecological investment fund to support the construction of PoW public chains such as ETC, ETHW, and iPolloverse; Bitmain's AntPool has also invested $10 million in the ETC ecosystem, and plans to invest more.
Conclusion
At present, influenced by the Ethereum merge, some developers have already engaged in the ETC ecosystem. As the GPU price takes a nosedive recently, selling GPUs at this time is not a good choice. If you want to keep mining and have idle GPUs, why not consider ETC? Cryptos such as Grin, RVN, and CKB also support GPU mining.
*As of September 22
ETC = $30.2
Grin = $0.065
RVN = $0.041
CKB = $0.0039