Everything you should know about the ETH Merge
In the past few years, one of the biggest topics in the cryptocurrency industry has been Ethereum’s switch from proof-of-work to proof-of-stake. After years of being postponed, the switch between consensus methods aka “The Merge”, will finally be taking place in September 2022. This blog post sums up everything you need to know.
Ethereum Mining is Over
Proof-of-work and proof-of-stake represent two different methods of securing a cryptocurrency network. As consensus mechanisms they ensure the security and processing of transactions in a digital network, but they differ in their approach. The developers of Ethereum decided that their ecosystem will no longer use the built-in security mechanism called proof-of-work. Instead they would switch to a system called proof-of-stake. Proof-of-stake does not use any mining hardware to secure the network and process transactions, and as a result, miners become obsolete after the Merge.
Proof-of-work (POW)
Proof-of-work (also referred to as “mining”) is the mechanism that keeps cryptocurrencies running. Miners run calculations on their machines to secure the network and its transactions, which costs money. Securing the network turns into “work” because of the significant effort miners have to put into it. The more machines and effort miners put into mining, the less likely they want to harm the network, which makes the network more secure. Miners are incentivized by getting rewards from the network in the form of newly minted coins.
Proof-of-stake (POS)
In proof-of-stake, there are validators instead of miners. Validators have to use their coins as stake via a smart contract. If they acted dishonestly, they would lose the staked collateral. According to ethereum.org, POS is more complex, but it has better energy efficiency, lower barrier to entry, and lower risk of centralization.
When this all happens
The exact date and time of the Merge is hard to tell in advance. The developers decided it would take effect at a specific block height – when the Ethereum blocks reach a certain number. As the difficulty and the rate of block issuance are both changing variables, the exact time can not be predicted. We only know it will fall between 15th and the 17th September.
What you need to know if you have been mining Ethereum with us
We will act in accordance with our Terms of Service §3.6 & §3.7: :
Your Hashpower remains active
“…the Customer accepts such risk and shall allocate Customer’s hash rate to other available blockchains and mining processes that use proof-of-work methodologies using the given algorithm for this Agreement.”
This means we will keep your hashrate running, and dedicate it to the next best thing. It is not yet clear which coin this is going to be, we will seek out the most suitable coin to mine after the merge. As your hashpower is mining algorithm specific, it will be a coin that uses the Dagger Hashimoto algorithm.
Expect some volatile days
We are switching your hashrate to a new coin based on what will happen on the market. It still has to be seen which chain emerges as the winner, considering hashrate, security, and feasibility, but you can be sure that we will pick the best one to mine. For a couple of days around the merge, we expect market and hashrate volatility to be high, so your mining outputs will likely need a few days to resume. Thank you in advance for your patience!
Pending ETH outputs will be sent out
If you have active ETH mining contracts, your remaining Ethereum you have mined will be transferred to your wallet. So if you see any ETH left on your balance sheet, it’s going to be sent to you as soon as possible. We will keep mining ETH until the last moment, meaning the transfer will happen after the Merge.
We will ask you to update your wallet address!
Once the market cools down and we pick the best coin to mine, you will need to add a new wallet address to your dashboard. As you start mining and receiving a completely new coin, we can only send your outputs to a wallet address compatible with that coin. You will be notified in time once your action is required.
For now, you don’t have to do anything, we are taking care of the smooth transition.
And don’t forget! We are sold out, but there are many Genesis Mining impersonators claiming we are selling hashpower. Do not fall for them! Do not send them any money or it will be lost. The only way you can purchase hashpower is via our official website. But as a reminder: we are sold out!
Yours,
The Genesis Mining Team
