Ethereum has been planning on becoming a proof of stake blockchain for the past few years. This will finally occur sometime in 2022, which has brought up the interesting question.
Will miners be able to mine Ethereum in 2022?
The answer to that is a little more complicated than you would probably think because it depends on when Ethereum can roll out its proof of stake blockchain to the public. However, it does appear that miners will not be able to mine in Ethereum in 2022 because it will be a proof of stake blockchain at that time.
With that out of the way, this article will cover everything you need to know about Ethereum mining in 2022. That will include how proof of stake works, why Ethereum may not be proof of stake in 2022, and what cryptocurrencies you can mine if Ethereum becomes unmineable.
Why Ethereum Wants To Switch to Proof of Stake
The Ethereum community has wanted to switch to proof of stake for a few years now. Unfortunately, the switch has been delayed for a few years because the developers could not figure out a way to make Ethereum proof of stake and keep the same level of decentralization as a proof of work validation model.
This changed in December 2020 when Ethereum developers launched something called the Beacon chain. Beacon is a public testnet for proof of stake Ethereum. Developers experimented with a few different systems and finally found a way to ensure decentralization with proof of stake.
Anyway, the Ethereum community wants proof of stake for two main reasons:
- Gas on Ethereum is insanely high. It tends to range from about 150 gwei to 250 gwei with it going to over 700 gwei at times of peak demand.
- The cost of the transaction varies based on the smart contract you interact with, but it usually costs $100+ to use Uniswap or OpenSea.
- Transaction speed on Ethereum is slow at 13 transactions per second.
- Speed is important on DeFi protocols because the price can change as each block is mined.
- Ethereum 2.0 (proof of stake) will have a maximum transactions per second of 100,000 at some point in the future.
How Will Ethereum Switch to Proof of Stake
A blockchain, especially one as large as Ethereum, switching from proof of work to proof of stake is a complicated process. The development team cannot simply change things overnight and hope it works out.
It will not work out – the staking will not be properly set up for enough validators to join and the whole thing will be extremely centralized until more validators come online.
In order to avoid problems with the transition Ethereum is dropping something called a difficulty bomb. This means that the difficulty of mining on the blockchain will increase as if more miners had joined the blockchain.
It will increase by about 600%, which will essentially make Ethereum unmineable for a profit.
This will force people to move to staking because, well, mining is not unprofitable and staking is profitable. Don’t forget that Ethereum will merge Beacon, so there will not be any downtime because the validators on Beacon can pick up the slack from the miners that inevitably stop mining.
When Will Ethereum Switch to Proof of Stake
Again, no one really knows when Ethereum will switch to proof of stake. We do know that the difficulty bomb will drop in December 2021, so that is a good guess on when the switch will occur.
With that said, the transition to Ethereum 2.0 has been plagued by delays and missed deadlines.
It is certainly possible that another delay could occur because that is simply how the development works.
That said, our best guess is that Ethereum will switch to proof of stake in December 2021 because there has been no sign of any delays. Beacon is already available for public use on the testnet.
Mining Probably Won’t Be Possible in 2022
To conclude, it seems reasonable to assume that mining on Ethereum will simply not be possible in 2022.
It’s not possible to mine on a proof of stake blockchain and all indications point to Ethereum moving to proof of stake in 2022. This will put miners in a difficult situation because all the mining equipment they own will no longer be relevant.
The next section will cover how miners are coping with the reality that Ethereum mining will not occur on the blockchain.
What Will Ethereum Miners Do When Ethereum Mining Stops?
Ethereum miners will wind up in a difficult situation when Ethereum mining stops in 2022. They will no longer be able to mine Ethereum, so the specialized mining equipment they own (ASICs) is useless unless they flash the mining rig to work with another machine.
GPU miners are in a slightly better situation because they mine on other proof of work blockchains. The most popular coin miners will switch to, in our opinion, is a cryptocurrency called RavenCoin.
RavenCoin is essentially the same as Bitcoin with larger, faster blocks and a larger maximum supply. The faster block speed in particular makes it a popular choice because it significantly increases profit.
The even better part is that the price of RavenCoin, or whatever coin Ethereum miners move to, will skyrocket as more hashrate moves to the blockchain.
Some miners have also taken a different approach and are setting up their own validation nodes on Beacon. The minimum requirement to set up a validator is 32 ETH, which is about $130,000 USD at current Ethereum prices.
Miners that cannot afford to set up their own node can pool together money to create their own validator. That is actually similar to how mining pools work with miners pooling together hashrate in order to split block rewards.
As you can imagine, Ethereum miners are not happy with the decision to switch to proof of stake. Unfortunately for them, Ethereum appears dead set on making the switch to proof of stake whether the miners like it or not.
That covers it for everything you need to know about mining Ethereum in 2022. The short of it is that Ethereum mining will likely not exist in 2022.
This is for the better of the cryptocurrency community as it will lead to lower gas fees in the long run. Miners will get stuck with irrelevant mining equipment (ASIC miners) or will be forced to mine on other blockchains, which is bad for them.
However, Ethereum is unsustainable with gas fees at an all-time high. The blockchain will slowly lose out to competitors like Cardano or Binance Smart Chain if something does not change.