The possible end to cryptocurrency mining on the latest and greatest GPUs seems to be looming, as Ethereum's long-in-the-making move to Proof of Stake is poised to finally advance this Summer. Speaking at blockchain and Web3 event Permissionless, core Ethereum Developer Preston Van Loon said that code for The Merge is ready for deployment, with final testing currently underway for a tentative main release in August.
Ethereum core Dev @preston_vanloon just said the eth merge is ready,they are now only testing, and expects the merge to happen in August. Packed room @Permissionless are excited about it. Great question @TrustlessState. Also on panel @drakefjustin pic.twitter.com/vX4beNatJ5May 19, 2022
Originally slated to occur in 2019, the Ethereum network's Merge event marks the point at which the blockchain's security and consensus mechanism switches from the current Proof of Work (PoW) model, in which miners use their GPUs to number-crunch transactions in the network, to the less hardware and energy-demanding Proof of Stake (PoS) design. That transition will mark the end of GPU mining on the Ethereum network, whose token value (around $2,000 at time of writing) makes it one of the most profitable coins to mine (by far) without the need for specialized equipment such as Intel's Blockscale ASICs.
The Merge towards PoS should also allow Ethereum to claim higher energy efficiency compared to other PoW-based blockchains (such as Bitcoin) by reducing the overall energy requirements for system security and transaction processing by an estimated 99,95%.
The news comes at a time where the classic high-performance GPU players, AMD and Nvidia, are gearing up for their upcoming next-gen graphics cards (RX 7000 and RTX 40-series cards, respectively). With current expectations on actual hardware launch dates, The Merge occurring in August would hopefully prevent a repeat of escalating GPU prices which hit the best current-gen offerings from AMD and Nvidia, which have only recently achieved a semblance of normalcy.
Intel, the newest player in this discrete GPU field, is still in the process of launching its discrete Arc Alchemist GPUs, which the company already confirmed wouldn't carry a software limitation on cryptocurrency mining. Once again, The Merge happening as planned could impact mining-buoyed demand for these cards, depending on their workload performance.
Additionally, The Merge is expected to cut the issuance of new ETH tokens by about 90%, thus reducing the rate at which new Ethereum tokens enter circulation, introducing higher scarcity and - as market players hope - higher pricing.
All things considered, Ethereum's transition to Proof of Stake should significantly reduce the usage of GPUs in blockchain workloads, thus eliminating most of the additional, forked market demand for new GPUs. This means a possible end to cryptocurrency-specific GPU income for manufacturers AMD and Nvidia, and a potential overflow of second-hand, mining-used GPUs towards the secondary markets, further impacting GPU pricing and availability. There are many moving parts here; let's just hope The Merge stays on course for once.
