During the last couple of months, a brand new digital currency known by the name of Ethereum has seen its ups and downs, but so far, it seems like Ether’s value and Ethereum’s popularity are both going forward in full throttle.
According to recent reports, it seems like miners, the people who operate large networks of machines to verify crypto-transactions in exchange for monetary rewards, are taking an interest in moving towards Ethereum. In fact, the recent increases in the prices of Ether have encouraged miners to expand their operations and start mining Ether as well. With this in mind, as miners also make money when the return of the digital currency generated and the cryptocurrency sold exceeds the cost of electricity thus generating profit. As bitcoin’s halving is quickly approaching, mining btc will become more difficult and expensive, which may explain the move.
It’s worth pointing out that in terms of mining, Ethereum is quite similar to Bitcoin. Transaction processing on its blockchain is currently being performed by the use of advanced graphic cards, and via mining pools of different sizes. Reports indicate that in the long-term, there are plans to switch to a proof-of-stake method instead thanks to its added benefits.
At this moment in time, a large migration of mining power from bitcoin to Ethereum would increase the currency’s value, but will likely also pose a couple of risks. With this in mind, Ethereum may be at the risk of having its transaction history become mutable, in case a single entity manages to gain control of the network, thus provoking a 51% attack, to which bitcoin isn’t as vulnerable right now. However, the proof-of-stake system plans to resist to this change, thus keeping big players out of the game, especially those who rely on ASICs, and not on graphic cards.
At the time of writing, the price of ether is of $13.77. While definitely not as high, it does pose a couple of risks to the future of bitcoin. However, economic analysts believe that the two currencies will live by each other’s side, considering the fact that Ethereum was not built to be a digital currency meant for purchases, but rather a way of dealing with smart contracts, and leveraging the full potential of the blockchain technology. Currently, the Ethereum network hashrate is of 2.8 terrahashes per second, definitely not enough to overpower the popularity of bitcoin in the short-term future.
Based on everything that has been outlined so far, what do you personally think about Bitcoin miners considering migrating to Ethereum in case things go south? Let us know your thoughts in the comment section below.