Experts talked about how the cryptocurrencies, to which the former miners of the leading altcoin switch, will behave, and what awaits the new ETHW token, in the event of a successful launch of the EthereumPoW hard fork
On September 15, a long-awaited event in the Ethereum community took place – the transition from mining to staking. The Merge update has been successfully completed, and owners of cryptocurrency mining equipment have begun to reconfigure it to mine other coins.
This resulted in the computing power of the Ethereum Classic (ETH) network more than doubling to 210 tera hash per second (Th/s) in the first three hours after the Merger, and on the Ravencoin (RVN) blockchain, the hashrate has risen to 21 Th/s, although throughout the year the figure was at the level of 3-4 Th/s.
At the same time, a team of blockchain developers led by the famous Chinese miner Chandler Guo announced the imminent launch of a fork of the EtherumPow network, which will support the mining of the ETHW token.
Experts told about the prospects for mining alternative ETH cryptocurrencies, and about what awaits a new token that may appear when the Ethereum PoW hard fork is launched.
“The flow of miners”
Based on real-time data, we see that computing power from Ethereum is mainly moving to Ethereum Classic (ETC) and Ravencoin (RVN), says BitCluster investment director Thomas Galovich. Due to the increase in computing power, the complexity of mining also grows proportionally, the expert said. He explained that, therefore, it is likely that without a significant increase in the price of coins, the profitability of their mining cannot be achieved in the long term.
The flow of miners into such coins will lead to a reduction in the profitability of their production, which was previously inferior to Ethereum, Aaron Chomsky, head of the investment department at ICB Fund, agreed with the previous expert. However, he clarified that this will force inefficient industry players to leave the market, which, in turn, will lead to a stabilization of the hashrate.
“Splash Volatility”
There is a strong relationship between the price and the amount of computing power in the network, said Chomsky. He pointed out that against the backdrop of a neutral market dynamics as a whole, the price of Ethereum Classic is growing by 1.7%, Ravencoin – by 1.5%. For assets with a much smaller capitalization, the price jump was stronger – Cortex (+2.6%), Ergo (+14.3%), Firo (+39.4%), the expert noted.
At the same time, he drew attention to the fact that profit-taking on the fact of fulfilled expectations in Ethereum itself (-2.2%) in the first time after the Merger is moderate. But the positive dynamics of alternative coins for miners may not continue actively, the specialist says.
Now we are seeing a surge in the volatility of Ethereum Classic and Ravencoin, says Alexander , an analyst at TradingView. He pointed out that on expectations before the hard fork, the prices of these tokens rose. However, the expert doubted that the coins would continue to rise in price, as the overall situation on the market is strongly bearish. In this case, the phrase “buy on rumors, sell on news” would be appropriate here, Alexander believes.
A project with a “foggy” future
The ETHW fork can happen a day after The Merge, the head of the investment department of ICB Fund recalled. In his opinion, it is obvious that most of the recipients of the coin will be happy to transfer it to cash (it is currently worth about $38.2), since the future of the project is vague.
Stablecoin issuers, NFT marketplaces, DeFi projects and infrastructure companies have said they will only support a PoS asset, the expert says. Whether the miners will have enough resources to duplicate the ecosystem from scratch and whether the community will follow them is rather a rhetorical question, Chomsky believes.
He noted that the ecosystem in Ethereum Classic has not actually formed. With a high probability, ETHW can suffer the fate of bitcoin forks: the project will not die, but will not be of great value, the expert suggested.
The combined increase in ETC and RVN hashrate is only a fraction (0.065%) of the total computing power (1,000 TH/s) dedicated to the Ethereum network on September 1, BitCluster’s investment director said. The question that arises from this simple calculation, he says, is where to send the rest of the power.
The expert believes that perhaps it will be ETHW. The Ethereum PoW fork will exist if enough hash power is switched to it, and if it is accepted by the community and developers, Galovich said. He explained that other cryptocurrencies are simply not able to accommodate such a huge amount of hashrate power.
According to Alexander , it is difficult to say something about ETHW tokens at the moment. The analyst admitted that he would avoid investing in this coin until it passes the test of time.
