Ethereum has recently started the transition towards the Proof Of Stake (POS) with the launch of Eth2 Phase 0 and the deposit contract. It’s still in motion and it won’t be until planned Phase 1.5 that the current Proof Of Work (POW) will stop being functional completely. Now, naturally this should discourage miners from purchasing further equipment or expanding their operation, however surprisingly insider reports suggest that the opposite is true.
According to Colin Wu – a reporter focusing on the Chinese mining industry, the interest in Ethereum mining seems to be higher than Bitcoin mining this year and several Chinese mining equipment manufacturers are planning to roll out ASIC miners this year. This is perplexing because the Ethereum POW mining is about to end in the next 2-3 years!
He further reiterated that new mining equipment is being developed for Ethereum, which will push the performance envelope of the previously known chips. However, the Chinese mining giant Bitmain is cautious in it’s approach, choosing small batch productions and more internal usage, than having a focus on commercialization.
The reason? Ethereum mining is currently a more lucrative market than even Bitcoin. According to Crypto Fees, Ethereum mining revenue is more than twice of Bitcoin. It means miners can generate heavy profits, even if for short term and then acquire further ETH tokens for the staking deposits. This ensures that even when POW comes to end, the miners would have generated enough profit to start another profitable endeavor.
The result? Ethereum network hash rate has been touching new highs lately, comparable only to the bull run phase of ’17-’18, because miners are aware that they have much to gain by contributing to the world’s most profitable blockchain network and the trend doesn’t appear to be slowing down anytime soon. The best part is that the network’s gas fees have been quite affordable lately and ranging from 30-50 Gwei, indicating that the fees isn’t being collected from overpriced transactions, but rather from the heightened economic activity on Ethereum.