Can You Mine Ethereum in 2022?
If you have been around in the crypto community, you will know that one of the dare questions in the minds of Ethereum investors and enthusiasts is what will become of the digital currency in 2022 and beyond.
Before now, Ethereum has announced the launch of a new upgrade which will happen any time in 2022. The upgrade – called Ethereum 2.0, will involve Ethereum switching its consensus mechanism from proof of work to proof of stake. That will definitely mean the end of mining on the Ethereum blockchain.
If you are also concerned about this, then you should keep reading this post. We will talk about everything you should know about Ethereum mining in 2022. The post will include key things about Ethereum and proof of stake and why there may not be a full switch to proof of stake in 2022. You will need to know all of these when buying Ethereum in 2022.
Ethereum and Proof of Stake; Are There Any Benefits for Switching?
For many years, many cryptocurrencies, including Ethereum, have used the proof of work algorithm to keep their system secured. But the algorithm also comes with its own downsides: high gas rate and excessive power demand. Because of this, Ethereum has been looking for a way to switch from proof of work to proof of stake to remedy the situation.
Unfortunately, this has refused to work for Ethereum because the developers couldn’t figure out a way to make proof of stake work for the Ethereum blockchain without sacrificing its decentralization. But in December 2020, they finally figured out a way to make it work. But why so much thirst for proof of stake, you may ask?
Proof of Stake (PoS) comes with a lot of benefits over the Proof of Work (PoW) algorithm – both for the blockchain and for the users. Below are some of the benefits PoS will likely bring to the Ethereum blockchain:
Gas fee will reduce tremendously with PoS
Presently, the transaction fee on the Ethereum network – called, is extremely high. And that has discouraged many developers and investors from using the blockchain. But PoS will be bringing great improvement to this.
Transaction speed will increase
Presently, Ethereum has a transaction speed of 13 transactions per second. But with PoS, the speed will likely increase to 100,000 per second. And that is more reason the Ethereum community are anxiously waiting for Ethereum 2.0 launch.
It will encourage the development of more applications on the blockchain
For instance, DeFi protocols require a high transaction speed because their price can change as each block is mined. So with the increased speed happening on the Ethereum blockchain, more developers will be coming back to build on the Ethereum blockchain.
PoS is less power-intensive
Since PoS will no longer require mining to add new blocks to the blockchain, the amount of energy required to maintain the blockchain will reduce tremendously. This will help Ethereum gain a good reputation in the media again against its counterpart, Bitcoin, which consumes a lot of energy for mining operations.
Improves security and scalability
With PoS also comes more functionalities, such as smart contracts. All these will come together to increase the security and scalability of the Ethereum network.
Will Switching to Proof of Stake Be Easy?
Well, as interesting as switching to PoS looks for Ethereum, it is definitely not going to be as easy. Switching from PoW to PoS is a complicated process, and that’s why it’s been a difficult process for the developers for years.
But to make things work, the developers are dropping something called the difficulty bomb to make the transition a lot easier. With the difficulty bomb, the developers will make mining a lot more unprofitable by increasing the number of miners on the network. That will force many people to move to staking. And so, mining will be wearing out gradually.
Also, Ethereum will be merging Beacon as one of their process to launching the new Ethereum upgrade. Even if more miners eventually stopped mining, there wouldn’t be much downtown because the validators on Beacon can pick up the slack until PoS fully has its way on the network.
When Will Ethereum Finally Switch to PoS?
The truth is that no one knows exactly when the switch will happen. Ethereum developers have defaulted on their schedule many times and caused lots of delays. So even when they scheduled the full launch to happen in 2021, it still did not happen as planned.
However, things have been on track lately. Beacon is already available for public use on the testnet, and so the Ethereum community expects to have the Ethereum 2.0 fully launched any time from now.
Can You Mine Ethereum in 2022?
From all that we have heard and seen about the advancement of Ethereum, it is safe to assume that mining may no longer be possible on the Ethereum network in 2022. Since the blockchain will likely be witching to a proof of stake algorithm, mining will no longer be needed to validate transactions.
Although this may not be good news for miners, Ethereum seems to be dead set on this decision, and nothing will seem to make them change their minds. However, some smart miners will definitely find a way around this by using their equipment to mine some other coins and make some profit – especially the GPU miners. Some will even sell their equipment altogether and forget about mining.
However, some miners can also come up with a different approach to mining on the Ethereum blockchain by setting up their own validation nodes on Beacon. To set up a validator, you will need 32 ETH. For miners that don’t have that kind of huge amount of money, they can come together to pull resources together to have one node and then split the reward they get from mining.
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