Ethereum, the second-largest cryptocurrency by market capitalization, has always been a focal point in the crypto space. According to its development roadmap, Ethereum is set to transition to Ethereum 2.0, shifting its consensus mechanism from Proof-of-Work (PoW) to Proof-of-Stake (PoS). This shift is considered by many as a potential new opportunity for the crypto market. But what possible impacts could Ethereum’s move to PoS have on the broader ecosystem?
Could Ethereum 2.0 Lead to a New Fork?
Some Twitter users have expressed concerns that Ethereum’s transition to a PoS consensus mechanism could lead to community division. While PoS may improve on-chain scalability, it might not gain unanimous support across the entire community.
If a fork occurs, some miners may shift their focus to Ethereum Classic (ETC) rather than supporting a newly forked chain. One Twitter user raised the question: "Where will all the hashpower go once Ethereum moves to PoS?" Ethereum developer Virgil Griffith responded by suggesting that ETC would become the largest PoW chain originating from Ethereum once the transition occurs.
Similar viewpoints were also voiced back in 2017. In a small-sample survey conducted in the past, 10 out of 28 respondents believed that Ethereum’s shift to PoS would lead to a migration of mining power toward ETC.
Which Projects Could Attribute Ethereum’s Hashpower? Is ETC a Contender?
Miners and mining hardware manufacturers are among the most knowledgeable when it comes to mining and hashpower. Regarding which project is most likely to benefit from Ethereum’s transition to PoS, Guo Yuzhi, Operations Director at Panda Miner and NiuBit, shared his insights.
He mentioned that Ethereum’s full transition to PoS is still approximately two years away. It remains uncertain whether a groundbreaking GPU-minable project will emerge within that time to take over Ethereum’s dominant position.
If no project of Ethereum’s caliber emerges, the growth rate of GPU mining power may slow down or even decline as Ethereum’s transition progresses. Existing GPU mining power would likely be distributed among numerous smaller, less prominent cryptocurrencies.
What Does It Take for a Project to Gain Miner Support?
The cryptocurrency mining market has seen numerous PoW-based coins over the years. Based on mining hardware characteristics, these can be broadly categorized as follows:
ASIC Mining Coins
- BTC-based coins (including BTC, BCH, BSV) use ASIC miners based on the SHA-256 algorithm.
- Coins with unique ASIC algorithms such as LTC, ZEC, DASH, DCR, and Grin (partially ASIC).
GPU Mining Coins
- Ethereum-based coins (mainly ETH, with ETC having declined) rely primarily on GPU miners.
- Other GPU-mined coins include Grin, Beam, XMR, AE, and other smaller projects.
Bitcoin and Ethereum, as the top two cryptocurrencies by market cap, dominate their respective categories and command the majority of mining resources.
Over the years, Bitcoin and Ethereum have become two flagship applications in the blockchain world:
- Bitcoin is the most secure and reliable decentralized digital currency.
- Ethereum serves as a decentralized world computer, enabling the execution of smart contracts.
Both have demonstrated long-term potential and reliable visions, earning strong market consensus and multi-billion dollar valuations. Bitcoin’s market cap stands at $180 billion, while Ethereum’s is around $20 billion. These high valuations support a vast mining industry, and miners, in turn, contribute value and security to these networks.
Therefore, for a cryptocurrency to gain widespread miner support, it must meet several essential criteria:
- Adhere to core blockchain values such as sufficient decentralization.
- Demonstrate long-term reliability and substantial market potential.
- Implement stable and reliable algorithms and consensus mechanisms with fair mining incentives.
- Exhibit consistent and growing market valuation over time.
Returning to the question of where Ethereum’s hashpower will migrate after its transition to PoS—it is clear that no single small token in the current market can entirely absorb Ethereum’s massive GPU mining power. Although new and promising GPU-mined tokens like Grin, Beam, RVN, and AE have emerged in recent years, none have shown the potential to reach Ethereum’s phenomenon-level status in the GPU mining sector.
Can ETC Upgrade and Catch Up with Ethereum?
According to data from Bitinfocharts, Ethereum’s current network hash rate is approximately 177 TH/s, which is more than 15 times that of ETC. However, due to recent price increases, ETC’s mining profitability has risen, leading to a gradual increase in its network hash rate.
ETC’s recent price surge may be linked to expectations around its upcoming hard fork. On September 12, ETC underwent an upgrade named "Atlantis," with another performance-focused upgrade planned for later this year. Some media outlets reported that the ETC community believes that after the Atlantis hard fork, ETC’s network performance will be on par with Ethereum’s.
While community optimism is growing, these claims remain speculative until the upgrades are fully implemented and tested. Nevertheless, ETC has recently garnered more attention and temporarily shed its reputation as a "doomsday vehicle."
As Panda Miner’s Guo Yuzhi pointed out, ETC still lags far behind Ethereum in terms of consensus, application development, and overall influence. Merely sharing a common origin with Ethereum is not enough to sustain long-term interest. If ETC aims to truly compete, it still has a long road ahead.
👉 Explore more about blockchain consensus mechanisms
Frequently Asked Questions
What is Proof-of-Stake (PoS)?
Proof-of-Stake is a consensus mechanism where validators are chosen to create new blocks based on the number of coins they hold and are willing to "stake" as collateral. It is more energy-efficient than Proof-of-Work.
How does Ethereum’s move to PoS affect miners?
Miners who currently use GPUs to mine Ethereum will need to transition to other PoW-based coins or shift their resources elsewhere, as Ethereum will no longer rely on mining.
Why is ETC considered a potential beneficiary?
Since ETC uses the same Ethash algorithm as Ethereum, it is easier for miners to switch their existing hardware to mine ETC, making it a natural destination for displaced hashpower.
What are the risks for ETC?
ETC has a smaller network, lower adoption, and less developer activity compared to Ethereum. Its success depends on technological improvements and broader market acceptance.
Could another cryptocurrency emerge to absorb Ethereum’s hashpower?
It is possible, but no existing GPU-mined coin currently has the market capacity, infrastructure, or consensus to fully replace Ethereum in the short term.
Is Ethereum’ transition to PoS final?
Yes, Ethereum’s shift to PoS is a core part of its Ethereum 2.0 upgrade plan and is expected to be fully implemented within the next two years.