The Fall of the Ethereum Miner

As we covered, the Merge was a huge success. The Ethereum network cut down its power usage by 99% overnight. There was one group of people that tried everything they could to oppose the Merge... Ethereum miners. They had spent thousands of dollars buying hardware and expensive mining equipment, but when the Merge happened and Ethereum became a Proof of Stake network, this was all worthless.

They tried to keep the party going by making a fork of the Ethereum network, that continued to run using Proof of Work called ETHPoW. A fork is a situation where a blockchain splits - there is now a second blockchain which shares all its history with the original chain, but is now going off in its own direction.

The fork ran into trouble immediately. in its first 24 hours of operation, it lost 75% of its value. The ETHPoW fork was also subject to an attack. The attacker took advantage of a replay exploit to steal 200 ETHW tokens. Replay exploits are possible when blockchains are forked. Essentially, hackers try to make the same transaction on both chains (the original and forked one) and take the money twice.

ETHPoW has rebounded a little since this initial turmoil, but there's another huge problem. The numbers suggest that rewards have fallen 90% for miners, compared to when they were mining Ethereum. Crypto Trader Eric Wall commented, "There simply aren't enough rewards to pay electricity bills".

It looks like the gravy train is leaving the station for these Ethereum miners.

Do Kwon is on the Run

We've talked about Do Kwon extensively before. Here's the tl'dr - he founded the Terra Luna project, which became a big, big deal in the world of crypto before it crashed spectacularly. Initially, South Korean prosecutors wanted to speak to Do Kwon about this crash (where about $40 billion was lost). Do Kwon made it clear he did not want to answer any questions. Now, Interpol has issued a red notice. That means Do Kwon is wanted internationally.

Throughout this, Do Kwon has been tweeting and insisting he's not on the run. He took to Twitter on Monday to say that he was "making zero effort to hide", "going for walks in malls" and "writing code in his living room". He just neglected to mention which country this living room is actually in... His location on Twitter was set to Singapore on Monday, but the Singapore police confirmed that he was not there.

Do Kwon is facing lawsuits in South Korea and the US. Prosecutors allege that he deceived investors by branding TerraUSD as a stablecoin when it was not able to hold its value. This raises some interesting questions.

When Do Kwon was asked in an interview, he outlined the differences, in his mind, between him and Elizabeth Holmes - the convicted fraudster and founder of Theranos. His argument was that Theranos and Elizabeth Holmes had a product that never worked, which they lied about. On the contrary, UST and the Terra ecosystem was a product that did work quite well... until the day it stopped. He wasn't lying or trying to deceive anyone - he just hadn't built a system that was robust enough to survive an attack. Now, of course, the courts will have to decide whether this is actually true. But if it is - is that enough to be considered a crime?

If and when he is caught, there is clearly a long legal battle ahead.