As early as the first half of next year, the Ethereum mining method will be converted to a ‘proof of stake’ method in which rewards are received according to the stake secured by Ethereum. The Ethereum Foundation has recently started operating a new Ethereum network called ‘Kintsugi’ that operates in a ‘proof-of-stake’ method.
Until now, Ethereum mining has mainly been conducted in a ‘proof-of-work’ method that verifies the block chain with the computing power of the graphic chipset and receives rewards for contributions. If Ethereum switches to the ‘Proof of Stake’ method, the current mining method becomes meaningless.
Accordingly, the supply and demand for graphics cards, which have been used for cryptocurrency mining instead of game or content production, is expected to improve to some extent. However, industry insiders said, “It is still too early to be optimistic.”
■ Why are GPUs mobilized for Ethereum mining?
Ethereum has entrusted the verification of forgery or falsification of the block chain that stores transaction details to those who have participated in the block chain.
Ethereum (ETH) was provided as a reward when users directly process cryptographic operations using a processor, graphic chipset (GPU), FPGA, or ASIC (customized semiconductor). This method is called ‘Proof of Work’ (PoW).
The algorithm used to prove the Ethereum blockchain works faster on graphics chipsets than on PC processors.
The Nvidia GeForce RTX 3080 handles 101.58Mh per second (megahashes), and the AMD Radeon RX 6800 handles 61.01Mh. On the other hand, the processor for PC is only 6.1Mh even with AMD Threadripper 2950X.
■ From the first half of next year, it will be converted to a ‘proof of stake’ that receives interest like a bank.
A large number of high-performance graphics cards were mobilized for Ethereum mining, which naturally led to a shortage of graphics cards and an increase in prices. It also had an impact on the decrease in the demand for assembled PCs and the increase in the sales volume of finished PCs by large domestic and foreign PC manufacturers.
However, the Ethereum Foundation announced on the official blog on the 20th that the launch of Ethereum 2.0, which operates in a ‘proof-of-stake’ method rather than a ‘proof-of-work’ method, would be imminent.
‘Proof of Stake’ (PoS, Proof of Stakes) is a method in which one’s token is entrusted to the Ethereum network as collateral and the mining opportunity is returned to the person who holds the stake. It is similar to depositing money in a bank and receiving interest at regular intervals.
The Ethereum Foundation runs a network ‘Kintsugi’ (Kintsugi, 金継ぎ), where developers can perform tests prior to the transition to Ethereum 2.0, and “reflects developer feedback to PC software and final adjustments are made to We will switch to a ‘proof-of-stake’ method,” he explained.
■ “Miners will move to other cryptocurrencies”
The Ethereum Foundation was originally scheduled to switch to a ‘proof of stake’ method within this year, but this schedule has been postponed to the first half of next year. After the conversion is complete, the Ethereum mining method using the graphics card will no longer work.
An official from a graphics card manufacturer and distributor who responded to the interview explained, “If the Ethereum mining method, which is considered the ‘big boss’, changes, it will definitely affect the supply and demand situation of graphics cards, but it is still too early to be optimistic.”
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The fact that graphics cards are more advantageous for cryptocurrency mining is valid not only for Ethereum but also for other cryptocurrencies. There is a high possibility that cryptocurrency miners will move to ‘Ravencoin’, which is gaining popularity recently after the conversion to Ethereum 2.0.
An official from a manufacturer said, “Miners will stick to Ethereum mining until the very end in order to get as much profit as possible from the proof-of-stake method.”
