Ether crypto miners are attempting to reuse the technology, rendered obsolete by last month’s “merge,” for other energy-intensive activities, potentially weakening the crypto project’s efforts to reduce its carbon footprint.
Companies and retail investors that lost after the merger’s success are turning to mining other cryptocurrencies, hosting services in the cloud and even heating their homes to power their devices.
One of the most ambitious projects in crypto history, The Merge transformed the operation and maintenance of the popular Ethereum blockchain, moving from a “Proof-of-Work” system to one known as “Proof-of-Stake”. .
This switch has drastically reduced the amount of energy required to mine new Ether tokens and maintain the ledger that tracks all Ethereum trades. Co-founder Vitalik Buterin claims the conversion would reduce global electricity consumption by 0.2 percent.
But that has led many investors to bet against the merger with stacks of redundant IT equipment. Many are trying to repurpose their power-hungry machines for other computing services. Ether miners use technology that includes graphics processing units (GPUs), computer chips that can process large amounts of data and are more adaptable than Bitcoin mining machines.
Big companies like Hut 8 Mining and Hive Blockchain Technologies have announced they are turning to cloud computing. “Following the fallout from the merger gets even worse when you consider that graphics cards have uses outside of mining, such as cloud computing, AI, and gaming,” said Alex de Vries, founder of crypto analytics website Digiconomist. “It might be nearly impossible to track it.”
Many ether miners were regular consumers as they used less electricity than bitcoin. “There’s a huge retail base in Ethereum mining because it’s much easier to run a GPU in your home than a Bitcoin mining machine,” said Ethan Vera, chief operating officer of Luxor Technologies, a mining and analytics company.
Chris Kyle, director of marketing at Flexpool, a joint crypto mining group, plans to use its 86 GPUs to heat his Vancouver home. The units are roughly the size of a computer keyboard, and graphics card temperatures can range from 40°C to 90°C.
“Now that it’s getting cold, I’ll turn it back on. . . All the power you put into them is converted to heat, so it makes sense to just run my GPU instead of turning on the heater.”
Some mine other energy-intensive cryptocurrencies. Around a fifth of the computing power used to mine the legacy Ethereum blockchain has been switched to alternative coins such as Ethereum Classic, Ravencoin, and Ergo.
However, the influx of new miners has increased competition and pressured an industry already grappling with high energy costs. “It’s extremely unlikely that these coins will still be profitable to mine as margins are being extremely squeezed,” said James Check, a senior analyst at Glassnode, a blockchain data and intelligence firm.
Others are waiting for a price increase. Jon Hartwig, a manufacturing engineer from Iowa, spends his evenings and weekends dusting and checking the cabling on his 600 GPUs.
“Many miners hold on to their equipment. . . I’ll sit on it and wait for the next thing to come,” he said.
Mark D’Aria, managing director of Bitpro Consulting, which resells used mining equipment, said the volume of GPUs sold on the platform has increased 30 percent in the month since the merger, and prices have not “dropped as much as we did.” I thought would like”.
“More people are selling . . . but it has slowed down a lot after those first two weeks. There is an enormous amount of graphics cards out there waiting for someone to figure out what to do with them.”