Is the Ethereum 2.0 beacon chain launched, or is it a good time to buy graphics cards for mining?


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The ETH2.0 beacon chain was officially launched. The price of ETH once again climbed to around $600. The price of graphics cards soared, and many participants sang. But the arrival of ETH 2.0 has also brought uncertainty to the recovery of graphics card mining. Many people are beginning to wonder, can they still get expensive graphics cards?

This year’s Ethereum mining revenue game space is greater

This year, the popularity of Ethereum mining is significantly higher than that of Bitcoin. Since the beginning of the year, Ethereum’s computing power has increased by more than 80%, far exceeding the increase in Bitcoin’s computing power. The main reason was the August DeFi market, which stimulated a strong rebound in ETH prices.

At present, cheap graphics cards have reached the point where one card is hard to find. According to the news from IT House on November 15th, although Nvidia’s new generation of RTX 30 series graphics cards have been sold, most platforms are out of stock or high premiums. ASUS UK once stated on its official Twitter that it would complete the delivery of the graphics card as soon as possible, and suggested that buyers contact the supplier directly.

A foreign netizen also posted an apology email from GeForce, saying that the RTX 3070 ordered in October was in high demand and therefore could not be shipped as scheduled. It is expected to be shipped out on November 20 or later.

Although manufacturers have issued announcements that they will continue to increase production capacity, it is expected that it will be difficult to ease supply and demand in the short term when currency prices are soaring. The backlog of graphics card orders may be shipped after December. We also understand that the new A10 Pro futures launched by SingDong will also be issued from December to January. Therefore, it is expected that after December, Ethereum’s computing power will continue to usher in explosive growth.

For mining, the price of the currency has always preceded the computing power. In the last bull market, the ETH price peaked and fell behind on January 10, 2018, and the mining power still skyrocketed until it reached its historical peak on August 6, 2018. At the moment when Bitcoin hits a new high, although the price of ETH continues to skyrocket, it is still far from the previous high. Due to the greater profit gaming space and the fact that the growth of computing power lags behind the currency price, this wave of graphics card mining machines will obviously continue for some time.

The probability of ETH double-chain merger will not be earlier than the end of 2021

The ETH 2.0 research team revealed in the latest AMA event in November that at present, the research work to achieve data sharding and merging has been completed, and only engineering development and coordination issues remain. At the same time, light client, merge and sharding will be Parallel development. This parallelization of work means that double-chain mergers may come early.

However, for developers, the coordination of the merger will be more difficult due to the ever-growing ETH1. Therefore, Vitalik believes that for mergers and sharding, we will not see a mature test version until the end of 2021. This means that at least until 2022, we may see the formal merger of ETH1 and ETH2.

According to official documents, after Phase 0 (PoS) is started, there will be two active Ethereum chains. Users can send ETH from ETH1 (PoW main chain) to ETH2 (beacon chain), but they cannot move ETH back to ETH1. The beacon chain of phase 0 was officially launched on December 1.

At stage 1, data sharding allows parallel transactions and will become the key to the future scalability of Ethereum. At this time, the ETH1 chain and ETH2 chain will still run in parallel. Phase 2 is the phase where the functions of the entire system begin to merge. The shard chain transitions from a simple data container to a structured chain state, and smart contracts will be reintroduced. The merger of ETH1 and ETH2 will occur in the middle stage 1.5.

Before the complete merger, ETH1 (PoW chain) will remain active, while testing and transition will be conducted on ETH2 (PoS chain). This means that the ETH rewards on the network will be paid to both Ethereum 2.0 validators and PoW miners. Therefore, the total inflation rate of the two chains may initially soar, but eventually tend to 0-1%.

God V once mentioned that once ETH1 and ETH2 merge, PoW will no longer exist. Then the time when stage 1.5 really comes will become the biggest variable that determines the fate of graphics card miners.

Problems faced by PoW miners later

According to the current market quotation, starting with 6 cards of 3080, the cost of the assembly machine is more than 40,000, and using the static calculation power when the currency price = $600, the payback time is less than 8 months. Whether it is selling coins while digging, or saving coins to sell at a high point, considering that in the upward trend, the computing power is lagging relative to the currency price increase and the high residual value of the graphics card, the true payback cycle of miners may be much smaller than the current static The predicted value means that the cost will be paid back before the middle of 21 years. So the double-chain merger that can only happen at the end of 21 or even 22 years will not have much impact on the current miners, and may even obtain excess returns. Because before the merger, Ethereum may have no new computing power, but the currency price has skyrocketed.

However, for some graphics cards or branded mining machines that can only be delivered after the Spring Festival, the uncertainty of the return and profit will increase, because the return time may be later than the merger.

As mentioned earlier, the current parallel development of Ethereum may result in the merger earlier than expected. If ETH breaks through the previous high of US$1440, the value of locked ETH is expected to exceed US$1 billion or more. The timing of the merger is related to the release of this part of the pledged user funds. Driven by the financial benefits, developers may be more motivated to merge Advance the time.

In addition, there is a saying that once ETH is completely converted to PoS, the original miners’ computing power can be transferred to other small currencies, continue to conduct graphics card mining, and eventually drive small coins to skyrocket. However, there are two problems with this view:

1. At the moment when cryptocurrency investors are gradually rational, will some small coins with little practical value really appreciate just because of the switching of miners’ computing power?

2. If the small currency accepts the huge amount of computing power cut from ETH, after the miners’ income is diluted, it may accelerate the mining and selling, and cause the price of the small currency to continue to fall. For example, the market value of ETC, the largest graphics card mining currency except ETH, is only 700 million U.S. dollars, and there are frequent negative news about 51% attacks. Its market value and fundamentals are not enough to support strong selling pressure.

It can be said that the switching of computing power brought about by the merger of ETH1 and ETH2 to small currencies, for these PoW coins, the outcome is not necessarily optimistic, and may even be catastrophic. Therefore, it may be unrealistic to continue to use graphics card mining after the dual-chain merger.

In any case, all assumptions about miners’ return to capital are based on the continued optimism of the market next year. In this process, the currency price and computing power will go through many games, and eventually reach a certain degree of income balance.

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