What Will Ethereum Miners do After The Merge?

Key Insights

• The Merge will force Ethereum's $19 billion mining industry to find a new home.
• Mining alternative Proof-of-Work coins will not be economically sustainable for most existing Ethereum miners. The total market cap of GPU-mineable coins excluding ETH is $4.1 billion, or roughly 2% of ETH’s market cap. ETH also makes up 97% of total daily miner revenue for GPU-mineable coins.
• Numerous large-scale miners plan to pivot towards a data center-oriented business with a focus on providing high-performance compute services.
• Miners can contribute their GPUs toward Web3 protocols like the Render Network, Livepeer, and Akash.

The long-awaited Merge will change Ethereum from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) based network. Ethereum’s early reliance on PoW powered by GPUs created a globally distributed mining industry that generated nearly $19 billion in 2021. Industry participants range from individuals mining on a small rig to publicly listed miners operating large mining farms with thousands of rigs.

Instead of leveraging computational power to determine which miner creates a new block, PoS relies on staked collateral to determine which validator will create the next block of transactions. Thus, if the transition to PoS succeeds, Ethereum miners will be made obsolete. So, what will happen to miners and their hardware after The Merge?