Ethereum switches to Proof of Stake -- the end of GPU mining?

Posted on Friday, May 21 2021 @ 12:20 CEST by Thomas De Maesschalck
Earlier this week, the Ethereum Foundation confirmed big changes are coming to Ethereum in the coming months. Ethereum will switch from a Proof of Work (PoW) to a Proof of Stake (PoS) model to confirm transactions on the blockchain -- and this has a couple of profound implications.

One of the major disadvantages of most cryptocurrencies is their massive power consumption. By switching to a PoS modem, Ethereum intends to become a much greener cryptocurrency. At the moment, it's estimated that that Ethereum miners consume about 5.13GW of power, the equivalent of the total output of a couple of large nuclear reactors. After the switch to a PoS model, this figure is expected to drop a staggering 99.95 percent! Basically, about the maximum output of an average onshore wind turbine.

Another way to look at it is to compare the energy consumption per transaction. For Bitcoin, a single transaction requires a massive 1,135,000Wh. The current Ethereum blockchain requires 84,000Wh and after the switch to PoS this figure will decline to just 35Wh.

Ethereum goes Proof of Stake energy chart

The end of GPU mining?

Hexus points out this could be the end of GPU mining -- at least when it concerns Ethereum. As the switch to PoS approaches, the market may get flooded by video cards that were used for mining:
ETH currently has a quite particular balance of GPU minability, and profitability due to its valuation, that have made GPU hardware mining so popular. Some reckon that there isn't a comparable cryptocurrency that could absorb a diversion of PoW power from ETH without becoming much more difficult to mine and basically making the job impractical/unprofitable in short-order. -- Hexus

About the Author

Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.

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