The Ethereum Fork

The merge is drawing closer. The last test merge - on the Goerli testnet was completed successfully earlier this week. The only thing left is the merge on the main Ethereum network. The target dates right now are 15th or 16th September. 

Unless you've been living under a rock, you know the Merge means that the Ethereum network is about to move from Proof of Work to Proof of Stake. There is one group of people who are incredibly unhappy with this development. 

They are Ethereum miners. They have invested thousands of dollars in mining equipment so that they can mine Ethereum in the Proof of Work system (solve complex puzzles which then allow them to add new blocks to the Ethereum blockchain) and receive rewards for this. Once Ethereum moves to Proof of Stake, this mining revenue will dry up completely. 

ETHPoW

Well-known Ethereum miner Chandler Guo is leading the charge to fork Ethereum and maintain a proof of work version of the Ethereum network, called ETHPoW. The main point of this fork is for Ethereum miners to keep extracting revenue. 

Nope, I don't have a clue about the content of those messages either but I'm sure there's some crazy stuff being sent. 

The Catch

The reason mining Ethereum was a profitable endeavour was because of the value of the Ethereum network. The ETHPoW would be a completely separate network, with no existing infrastructure or utility. Because of this, it would have no value - to begin with at least.

Forked chains rarely survive because of this reason. Forked chains need developers who are interested enough to build on the chain and members of the community who can help promote the chain. 

So unless these miners can get people to build on ETHPoW, it will be just a way for them to extract revenue for a few more months before the project dries up. 

Kevin Zhou, who is the founder of crypto hedge fund Galois Capital, believes that ETHPoW will not go to 0. He estimates that the Proof of Work could grab 2-10% of Ethereum's market value (although he stresses that these are very rough estimates).  

The Fallout

There will be one major fallout to the EThPoW fork... confusion. Every D'app, project or protocol built on top of Ethereum will either have to support two chains, or will have to pick one on the two chains. This process has already started, with Circle announcing that their stablecoin USDC will not support a proof of work fork. 

This controversy will be exacerbated if there are problems with Ethereum's shift to proof of stake. If that happens, there may be more people moving to support the proof of work fork. 

The Merge is expected to happen sometime in mid-September - that's how long the miners have to sort out the details of the fork. So there will be a lot of movement to come - watch this space!