Ethereum after "The Merge": the price has fallen, and GPU mining is almost dead

Ethereum after “The Merge”: the price has fallen, and GPU mining is almost dead


In recent years, large digital currencies have repeatedly come under fire because of their energy consumption. According to, the Proof-of-Work consensus used by many is based on securing transactions using cryptographic calculations, which tend to become increasingly complex. However, the networks reward their users for performing these calculations by giving away coins or tokens. This process has received the general name “crypto-mining”.

Ethereum, one of the most important blockchains in the world, has now put an end to this. During a two-step process called “Merge”, which was recently completed, the procedure was changed. Instead of Proof-of-Work, Proof-of-Stake is now used. Based on available assets, participation time, and other factors, the network uses a weighted random process to decide who will generate the next block in the chain and receive a reward for it.

This was also accompanied by fundamental changes in how the network handles transactions. In other words, the “Merge” heralds a new era for Ethereum.

Energy consumption should be radically reduced

This should solve several problems. For example, this will make it impossible for one participant to gain actual control over the network by acquiring large computing power. And due to the absence of the need for mining on processors or graphics chips, the energy demand is much lower. In the case of Ethereum, it is hoped that the “merge” will lead to a reduction of more than 99 percent.

In this regard, they are probably on the right track. Shortly before the transition, the hashrate of the Ethereum network remained unusually high, which allows us to conclude that many miners did not want to prematurely switch to another blockchain and stayed with it until the last Proof-of-Work blocks.

Then everything changed dramatically.

According to Ben Gagnon, head of mining at Bitfarms, the “Merge” dealt a fatal blow to mining using traditional video cards. If earlier Ethereum mining was profitable, at least judging by lower electricity prices in the US, now it has become unprofitable. Anyone who uses Nvidia RTX 3090 for mining at a kilowatt-hour price of 6 US cents is now clearly out of the game at a loss.

“Less than 24 hours after the merger, GPU mining died,” Gagnon sums up.

In Ethereum Classic, the hard fork of which is Ethereum, whose blockchain continues to work on the Proof-of-Work principle, daily losses are 7 cents here. For Monero, it will even be a loss of 37 cents. Ravencoin, which is relatively insignificant, still has a profit of 2 cents. In general, GPU mining is now beneficial only for coins that do not have the appropriate market volume, or whose network lacks liquidity.

The Bitcoin community is not interested in converting yet

Conversion for the Bitcoin blockchain, for which separate commercially available video cards have not been used for mining for a long time, but specialized systems have been used, has been a constant topic in the past. However, it seems that neither the developers nor the network members are interested in such a step. Whether this will change now is still unknown.

As blockchain expert Robert Schwertner told STANDARD, Bitcoin is now practically the only “rogue” in terms of energy consumption and carbon footprint. A more energy-efficient design, which he believes is necessary, fails not so much because of the technology as because of the participants.

Energy consumption ensures the stability of the blockchain, which is important for investors. At the same time, the Proof-of-Work process of the world’s largest blockchain today is the basis of business for many miners. At the moment, there is no desire, but the transition to Ethereum should create pressure in this direction, since now it has become more interesting for companies.

Technically, the “merge” in Ethereum was successful, according to Schwertner. The blockchain continues to work stably, but it is unclear whether this also applies to the numerous applications that run on it.

A significant drop in the price of Ethereum

In fact, the “Merger” passed without problems: no mistakes, no complications, but the expected increase in the share price did not happen. The merger even had the opposite effect on the price of ETH: immediately after the update took effect, Ethereum experienced a slight drop, followed by additional losses of more than 8% (data ). No other cryptocurrency from the top 50 is currently being adjusted so intensively.

This is not surprising: like events with a half-decline in the Bitcoin exchange rate, such catalysts unfold their effect with a delay, and the consequences for the price usually become apparent only in the long term.

The price movement of ETN in 7 days. Source:

The price movement of ETN in 7 days. Source:

But, anyway, as a result of the transition, the price of Ethereum suffered during the transition. After both stages of the two-stage process, it fell sharply – from the initial $1,635 to the current (as of September 21) $1,585, which means a drop of almost 16 percent. However, it should be noted that the price of Bitcoin has fallen by about 11 percent over the same period. Accordingly, it is difficult to assess whether the “merger” will lead to a lasting loss of trust.

However, investors are expressing disappointment. Popular crypto commentator Greg, for example, writes to his more than 342,000 Twitter followers: “The merger didn’t work or why did Ethereum fall? I thought we should already be at the level of 10 thousand dollars.”

What critics say

Ethereum is being criticized not only because of the disappointing price dynamics and mining. Many experts also warn about the disadvantages of the Proof-of-Stake model. For example, Bitcoin enthusiast “CarlBMenger”, named after an Austrian economist, warns:

“In the new Ethereum share proof protocol, money is a colossal force. Congratulations, you have just recreated the fiat system in cryptocurrency.”

Accusations of centralization also take place: according to the data, two-thirds of the capital in Ethereum stacks accounts for only seven organizations. Samson Mou, a recognized Bitcoin maximalist and one of the most famous figures in the industry, is also not shy about his opinion, calling the cryptocurrency in its current form “a database managed by a marketing company.”

However, regardless of monetary theory: The Merge is a technical masterpiece.


In the future, Ethereum and other proof-of-stake blockchains, as well as proof-of-work systems, may face regulatory challenges, Golem reports. At least in the US, where the Securities and Exchange Commission (SEC) has hinted that Ethereum may now become subject to securities regulation due to its staking mechanism. This does not affect Bitcoin and Co., but the US government is considering introducing restrictions or even a ban on Proof-of-Work.