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Ethereum co-founder Vitalik Buterin said the upcoming blockchain’s merge to proof-of-stake consensus would not adversely affect miners minting new tokens on the blockchain’s predecessor, Ethereum Classic.
Speaking at a webinar on Saturday, Buterin noted that he doesn’t expect any adverse effects on the blockchain since most of the Ethereum community is supportive of the merge. The merge to proof-of-work negates the need for Ethereum miners that currently secure the network using expensive mining equipment and earn ETH in the process, for whom the merge could result in significant financial loss.
As a result, many miners could flock back to the original Ethereum blockchain, Ethereum Classic, which still uses proof-of-work. Ethereum Classic’s roots can be traced back to a philosophical divide in the Ethereum community following the 2016 hack of The DAO, a decentralized autonomous organization whose rules of operation were encoded in code contained in a smart contract.
The DAO was hacked to the tune of $3.6 million and divided the Ethereum community. One faction voted to move funds from The DAO’S smart contract to another smart contract. In contrast, others elected to preserve the existing smart contract. The first group selected to move the funds from the smart contract to a smart contract on a new chain or “fork,” while others elected to preserve the old blockchain, known as Ethereum Classic, which still uses a proof-of-work consensus mechanism.
Users should not notice any differences, Beiko says
There are concerns that miners flocking back to Ethereum Classic could disrupt the merge. Ethereum underwent a spate of denial-of-service attacks after the 2016 fork, and crypto exchanges are expected to proceed cautiously when the merge occurs. Ideally, users should not notice anything different, says developer Tim Beiko.
Buterin added that Ethereum Classic has a strong community and a robust product for proof-of-work diehards. The community strongly promotes proof-of-work values. Nevertheless, the market could still split.
Buterin hopes people don’t lose money
Declining revenues from Ethereum mining caused by the extended downturn in Ethereum prices have already put miners under financial pressure. Institutional bitcoin miners have had to sell bitcoins to strengthen liquidity on balance sheets. Others are taking loans against bitcoin mining machines, known as Application-Specific Integrated Circuits.
Buterin said he hopes that, in any event, people don’t lose money.
In May 2022, he said that, barring any problems, the merge could happen in August. Problems could mean that the merge gets pushed back to Sep. or Oct. 2022.
At press time, Ethereum was hovering around the $1718 mark.
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