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The Ethereum merger is approaching. Is it feasible for miners to say goodbye to Ethereum and Ethereum bifurcation?

Time : 29/06/2021 Author : kj3gp1 Click : + -
        Hello, I'm laoshuteng. As the merger and upgrading of Ethereum is approaching, the topic of "where will Ethereum miners go after upgrading" in the crypto circle has been widely discussed again. The first version of Ethereum was launched in 2015 (also known as serenity), which is an upgraded version of eth. The main difference between the two versions is that eth2.0 uses different mechanisms, proof of interest, sharding and layer 2 solutions. The transition to eth2.0 is a very complex technical work, requiring time and rigorous testing. Eth2.0 is a multi-stage transformation of the consensus mechanism from proof of work (POW) to proof of entitlement (POS) in Ethereum network.
        Just as pow blockchain relies on miners to verify transactions, POS consensus mechanism relies on "pledgers" to verify transactions through running nodes. Ethereum ecosystem developers initially introduced the beacon chain, which is a coordination mechanism responsible for creating new blocks in the chain, ensuring their effectiveness, and rewarding verifiers to ensure network security before the "merger" is fully implemented. The network load will be distributed in 64 independent slices, which will process information at the same time, thus making the overall transaction time faster and more efficient. Among the plans for Ethereum miners to migrate to other POW networks, the market has the highest demand for Ethereum classic networks. Under this favorable expectation, etc tokens have seen an increase of about 170% in the past month, and the increase of eth in the same period is about 52%.
        In addition, as of July 28, according to the data of 2miners website, the total network computing power of Ethereum classic network has increased by about 19% in the past month, and the total network computing power of Ethereum has increased by about 9.3% in the same period. From the perspective of token price and the growth of computing power of the whole network, the market seems to be more optimistic that the Ethereum classic network will undertake the computing power and ecology after the merger of Ethereum. In addition, ant mining pool, a subsidiary of bitland, also said that it has invested US $10 million to support the development of etc ecosystem and plans to invest more funds to strengthen ecological construction. However, at present, the total network computing power of the Ethereum classic network is about 25th / s, while that of the Ethereum classic network is about 935th / s, a difference of nearly 37 times. After the large-scale migration of Ethereum miners to the Ethereum classic network, it will inevitably lead to a surge in the total network computing power and a significant increase in the mining difficulty.
        In addition, the current price difference between Eth and etc is about 42 times, and the mining income of miners after migrating to the Ethereum classic network will also be greatly reduced. At the same time, the ecological development of Ethereum classic network is limited. According to defillama data, as of July 28, its ecology has only three defi projects, namely, hebeswap, etcswap and swapcat. Even under the stimulation of multiple favorable factors, the current ecological scale can hardly support the long-term maintenance of the high market value of etc tokens. Under the influence of the above factors, the mining cost may exceed the income at that time, leading to some miners choosing to leave the site.
        In addition to the unequal cost-benefit, due to the relatively small computing power of the Ethereum classic network, there is a hidden danger that a single large miner or several miners will jointly cause 51% attacks after the migration of Ethereum miners. For example, the lowest mining computing power of the top six mining pools in Ethereum is about 49th / s, which is higher than that of the Ethereum classic network. Compared with the Ethereum classic, the computing power of other blockchain networks is lower. For example, the computing power of ravencoin is about 2.6th/s, and that of monero is about 2.8gh/s. It is difficult to undertake the migration of Ethereum miners. As other POW networks cannot bear all the computing power of Ethereum miners, the cost-benefit inequality may be caused after the migration. Next, let's take a look at the Ethereum bifurcation scheme discussed more.
        In the long history of the encryption industry, we are not unfamiliar with the bifurcations of the blockchain network. There are various reasons for the bifurcations, which may be technical reasons and differences in values, such as the famous BTC and BCH bifurcations, Ethereum and Ethereum classic bifurcations. To put it simply, for example, after the upgrade of Ethereum, a blockchain eth-pow with pow mechanism is branched out, so dapps and protocols in the Ethereum ecology need to be selected, and different dapps and protocols are interrelated and nested. For example, NFT projects such as boring apes need NFT trading platforms, and the defi protocol needs Oracle machines, so the former must follow the latter.
        At the same time, defi has become the infrastructure of the entire Web3 world and accounts for half of the whole ecosystem. Most of the activities on the chain will ultimately depend on the defi protocols such as transactions and loans. Therefore, the choice of the defi protocol will also have a significant impact on the applications in other fields. As is known to all, defi applications are highly composable and interdependent, and it is difficult to separate them. For example, users often mortgage BTC, Eth and other assets on loan agreements such as AAVE, lend stable coins usdc and usdt, and then pledge the borrowed stable coins to curve to provide liquidity, or purchase other token assets through uniswap. This close correlation between applications will lead to convergence of choices.
        Assuming that AAVE and uniswap choose the upgraded POS chain of Ethereum, curve will make the same choice based on the consideration of protocol security, user stickiness, asset size, etc. The choice of the header defi protocol will probably become the wind vane of other protocols. For the defi protocol, the most important are the basic assets such as usdc and usdt, so the selection of the protocol will be based on which side the asset party chooses. We know that these assets are supported by actual collateral, and their intrinsic value will not change fundamentally with the issuance of a forked token in the forked chain. Take the usdc with a market value of nearly US $54 billion as an example, its circulation will not double due to the emergence of the eth-pow chain. Because the dollar reserves behind it have not changed, its total value is still US $54 billion. Therefore, if the issuer circle still chooses the upgraded Ethereum chain, the "usdc fork currency" on the eth-pow chain will not be recognized because there is no reserve support.
        If circle decides to allocate usdcs to two chains, it is also worth considering what proportion to allocate. Similarly, the "pricing" after allocation also needs to be considered. For example, whether usdcs on each chain correspond to $1, or the total value of usdcs on both chains is $1. In addition, if Ethereum miners are forked, how to coordinate a large number of miners to choose the same forked chain will not cause miners to set up their own doors one after another and form a situation of "group separatism" of multiple forked chains. At that time, the choice of circle may be more difficult. In addition to usdc, there is also usdt on Ethereum. If the two choose the same chain, the choice of the defi protocol is relatively simple. However, if the choices of usdc and usdt are inconsistent, such as the choice of the POS chain by usdc and the choice of the pow chain by usdt, the choice of the protocol parties will be more complicated.
        From a commercial point of view, the choice of asset parties such as usdc and usdt is bound to be for their own development, which is conducive to the expansion of asset issuance. What has a significant impact on the issuance is "user demand". If the demand of users increases and more users are willing to exchange their dollars for the asset, the issuance will also rise. Thanks to the development of defi, gamefi, NFT and other fields, the market value of usdc has increased by about 45 times in the past two years. Therefore, ecological prosperity can promote the growth. Only when the ecological scale is larger and the demand is more and more, can circle issue more usdc and earn more income.
        Therefore, whether it is usdc or usdt, their choice is based on whether the ecology of the future blockchain network can continue to develop to expand its scale. The real assets of human society are transferring to the virtual assets, which is a big historical dimension. In the face of great opportunities, we can't see, understand, see, and it's too late. This wealth movement lies in the cognitive level. Those who dare to participate, learn and act will benefit at this stage. Our content and articles are helpful and enlightening to you. You are welcome to share them with people around you and let many people benefit. The opportunity is for those who are prepared. OK, that's all for today's sharing. I will also sort out some cutting-edge information and project comments from time to time, bring you the analysis of leading projects of other tracks, update more cutting-edge information of the currency circle, and like friends to give comments. Welcome to put forward your valuable suggestions in the comment area.
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