GPU miners left searching for profit post Merge

Quick Take

  • Intense competition among GPU miners leaving Ethereum leaves little profit to be found on other blockchains.
  • It is estimated as many as 20% to 30% of miners have shut down operations altogether.

Miners searching for new blockchains in the wake of Ethereum’s Merge are struggling as intense competition for blocks reduces profitability.

With Ethereum’s move away from proof-of-work based GPU mining to a proof-of-stake based consensus mechanism, many of the miner operators who formerly supported the world’s second-largest blockchain network are moving to other PoW networks like ETC and RVN.

But with the eager embrace of new miners to these networks comes a rise in block difficulty that, at current market conditions and energy costs, is making it difficult for GPU miners to turn a profit, according to Ben Gagnon, chief mining officer at bitcoin miner Bitfarms (BITF).

“GPU #mining is dead less than 24 hours after the #merge,” Gagnon tweeted, adding that three of the largest chains that utilize the mining method offer negligible profits and that “the only coins showing profit have no marketcap or liquidity.”

Rising hashrates, falling profits

As the hash difficulty of networks like ETC and RVN continues to rise, profit among competing miners has driven down potential rewards. On ETC block rewards fell from a 24 hour average of around 58 cents to just over 1 cent, while rewards for blocks on RVN fell from a 24 hour average of $1.77 to just over 4 cents in more recent hours according to Minersta