Today, Ethereum is operated by miners using computer graphics cards. Following the Merge, ETH mining operations will be obsolete.
Today, Ethereum is a proof-of-work (PoW) blockchain operated by miners using computer graphics cards. Following the Merge, Ethereum will be a proof-of-stake (PoS) blockchain, making ETH mining operations obsolete.
Ethereum Proof-of-Work Mining
Mining ETH is big business, with ~13k ETH paid to miners every day. Following the Merge, miners will get nothing. There are other tokens that can be mined on ETH mining rigs, such as Ethereum Classic (ETC) and Zilliqa (ZIL), but some powerful ETH mining groups want to fork Ethereum and create their own PoW version of ETH.
How to Get the ETH Proof-of-Work Forked Tokens
Generally speaking, if you store your ETH somewhere you control, like MetaMask or a Ledger, you will receive any PoW ETH forks automatically. If your ETH is on an exchange, you will need the exchange to integrate with the new token in order to receive it.
Currently, none of the major exchanges have announced a plan to integrate with the proof-of-work chain.
What’s a Forked ETH Going to be Worth?
We can’t know for sure how much a potential ETH PoW token could be worth, but this isn’t the first time a major project was forked and air dropped to the original token’s holders.
In 2017, Bitcoin Cash (BCH), a hard fork of Bitcoin, was distributed to Bitcoin holders. BCH was integrated into several major CEXs and ended up rising in value from $400 to $4k over a few months in 2017. At its peak, one BCH was worth almost .2 BTC. Of course today, BCH is worth just $120, or .006 BTC. Another fork, Bitcoin Gold (BTG), was also adopted by mainstream crypto platforms, and the BTG token followed a similar trajectory: it peaked at $450 (.07 BTC) in 2017, and today it trades for just $25 (.001 BTC).
It’s clear that, when executed properly, a fork of a major project can be quite valuable–if even just for a short time. Arthur Hayes, former CEO of BitMEX, believes powerful players in the ETH mining world will put significant resources behind a PoW ETH fork because their mining operations aren’t profitable when mining ETC, ZIL, or other PoW tokens.
But for a forked token to be valuable, it has to be adopted by the crypto ecosystem. With Bitcoin, this was simple: pay DEXs to integrate your forked token. With Ethereum, it’s more complicated. Ethereum is a smart contract platform, and its ecosystem relies on a few powerful players, such as Chainlink, Circle, and Ethermine.
The Ethereum Foundation Doesn’t Want a Proof-of-Work Fork
It seems like the Ethereum Foundation is trying to get ahead of any PoW ETH forks by taking pledges from key projects in its ecosystem. Chainlink is by far the most popular oracle on Ethereum, and Circle’s USDC stablecoin is the most popular stablecoin in the West. Ethermine is the largest ETH mining pool operator. If Ethereum’s major players refuse to work with a potential PoW ETH fork, why would Coinbase, a Circle partner, or any other American DEX list these tokens?