It’s fair to say that the future of Proof of Work (PoW) currencies is at stake, pun intended.
“You build on failure. You use it as a stepping stone. Close the door on the past. You don't try to forget the mistakes, but you don't dwell on it. You don't let it have any of your energy, or any of your time, or any of your space.” ― Johnny Cash
In one swift motion to move to Proof of Stake (PoS), Ethereum has rendered itself pointless - unless paying insane fees for use-cases other chains can perform for low fees is your cup of tea. I fully support Proof of Stake currencies and switches, such as with ZCash (ZEC), however, that is under the assumption that the benefits of PoS come with the switch.
Ethereum 2.0 (ETH) just did the world a big favor by cutting power usage at a time when energy is a hot commodity, especially in areas of Europe that are being dramatically affected by Russian efforts to remove western sanctions by cutting off their gas supplies, winter is coming and we’re seeing record high temperatures. The USA will not remove Russian sanctions, if anything, they will add more.
Meanwhile, Ethereum, which Vitalik Buterin said was only 55% to its PoS goals upon the PoS switch, has lost its use case incentives. Ethereum killers are eyeing ETH 2.0 like it’s an injured bully on the playground, ready for revenge. PoW miners are almost entirely unprofitable unless you get free ASICs, GPUs, and electricity, anyway.
This comes at a time when the US government is threatening to ban Bitcoin (BTC) and cryptocurrency mining due to its massive power consumption and potential threat to the US Dollar. I’m sure there are plenty of ETH maximalists out there who would argue, but please, leave a valid argument and I wish you luck with that.
Other currencies offer far better staking rewards and crosschains appear to be the future of blockchain. Why would anyone invest in something that is sure to cost them more to use and profit them less? Putting up with Dogecoin (DOGE) and Shiba Inu (SHIB) shills is painful enough, but this new meme coin is a next-level bad joke.
Unless ETH developers can rapidly and dramatically reduce transaction fees and compete with higher staking rewards, I believe we are seeing the beginning of the end for Ethereum. I don't believe Opensea NFTs will save this currency. Who will take over do you think? Polygon, which is already incorporated into Opensea? Perhaps Solana? Any beat Ethereum in its current form.
I wonder where that mining hash power will go now with great curiosity. Ravencoin? Monero? Zcash? Bitcoin Cash? Ethereum Classic? None of these are profitable for me to mine with a high-end GPU, but if they gain massive popularity due to the switch, they could become profitable - most likely just one of them, but which one, if any?
Additionally, some of that hash power will migrate to Bitcoin (BTC) and make the rewards less profitable than they already are, so this move did not affect Ethereum alone, it’s going to reshape the crypto space.
Ethereum has been promising a full switch to a more functional form of PoS since 2016. At what point are people going to wake up and say, "We want a higher standard and fewer fees, figure it out, or get out of the way."
It would appear ETH 2.0 is DOA (Dead on Arrival), and no one knows what will happen next. I take some solace in knowing that this is good for the planet, but I imagine many people will be hurt by this as the crypto space tumbles with the pains and gains of adaptation. Decentralized finance deserves a higher standard than what has been delivered.
The merge was nothing but an overhyped update to a massively over-marketed project. Feel free to discuss it with me, but know that if you disagree with me, you've been lied to. Use your ability to think both critically and objectively on this subject and ask yourself if this is what we deserve for a wait overdue by the better half of a decade, and if you still disagree, I am nothing like you.
As always, comments & suggestions are highly encouraged.
Stay smart & Stay safe.
-Thomas Wolf
Pronouns: He/Him/His
DISCLAIMER
I am not a certified financial, tax, or legal advisor, analyst, or planner. The above information should not be considered advice but as an opinion intended to share information and ideas for entertainment and independent research purposes. I am not responsible for any losses or damages incurred due to misinterpreting my personal opinions for professional advice.