Amid a bearish cryptoeconomy since 2018, Ethereum’s march toward proof of stake (PoS), and rising ProgPoW debates, the Ethereum hashrate has fallen by 50 percent since the network’s all-time high hashrate of nearly 296 TH/s last August.
With Ethereum’s hashrate now hovering around 150 TH/s, it remains to be seen whether the network’s peak hashrate will be achieved again before the blockchain transitions from proof-of-work (PoW) mining to staking, or PoS, per the forthcoming and much-hyped Serenity “ETH 2.0” upgrade.
Hitherto, Ethereum has relied on mining to bootstrap its eventual pivot to staking. Mining involves advanced machines, like GPUs or ASICs, completing complex mathematical problems in order to validate transactions and mint new coins. On the other hand, staking involves users holding sums of crypto in special wallets in order to perform these same functions.
Hashrate for $ETH has dropped 50% since its ATH and sees no recovery. vs $BTC also once saw a drop for 50% but steadily climbed back up now it’s 80% (50E) of ATH (60E)
This is the most direct reflection of confidence from miners based on their expectation of that PoW coin. pic.twitter.com/63NU9E9tCs
— Dovey Wan (@DoveyWan) March 24, 2019
With the initial release of the ETH 2.0 spec earlier this year and murmurs of Serenity growing, it seems likely that a non-trivial swathe of Ethereum’s acute 50 percent hashrate decline has resulted from Ethereum miners closing up operations before the arrival of staking and the consequent redundancy of their rigs for ether mining.
It also remains to be seen how much further this hashrate decline trend could go in the months ahead, namely before Serenity is formally released. Even still, Ethereum’s current hashrate still makes it the most secure cryptocurrency network behind Bitcoin (BTC), which itself presently boasts a whopping hashrate of more than 45,400 PH/s.
ProgPow Debates Heat Up
Another wrinkle in Ethereum’s transition from mining is the network’s potential transition to ProgPoW, a PoW algorithm that is resistant to ASIC mining.
Ethereum developers had previously announced their tentative decision to switch to ProgPow back in January. The reason? To avoid mining centralizing ETH ownership in the hands of a few powerful ASIC farms before staking. As such, ProgPoW would reduce the efficiency of ASICs mining ether to no more than 20 percent of the efficiency of GPUs, which are more affordable and accessible.
However, in recent days the debate around ProgPoW has turned more contentious, with more voices in the community speaking up against a change from the Ethereum network’s current Ethash algorithm. Critics, like Gnosis founder Martin Köppelmann and Spankchain founder Ameen Soleimani, have argued the pivot is unnecessary and thus a waste of time.
I oppose #progPOW.
Retweet if you do as well.
— Martin Köppelmann (@koeppelmann) March 22, 2019
Conversely, ProgPoW’s supporters are also holding their ground. Ethereum core and Ethereum Name Service (ENS) developer Nick Johnson argued on March 23rd that ProgPoW is in line with Ethereum’s original vision of accessible mining:
“Ethereum originally had a goal of egalitarianism in mining; anyone should be able to participate, using hardware they may already have. Regional power prices and economies of scale have put a dent in that, but giving up on ASIC resistance would kill it for good.
Do we want that?”
For now, Johnson’s question stands as an open one.
ProgPoW Audit Moves Forward
Wherever the ProgPoW debates go from here, an audit of the consensus algorithm is advancing under the supervision of the Ethereum Cat Herders, a “group of independent contributors to the Ethereum community” per their GitHub.
ProgPoW Audit: Goals and Expectations by @EthCatHerders. Includes a link to our @GetGitcoin bounty! https://t.co/aEWprnlqD1
— Hudson Jameson (@hudsonjameson) March 25, 2019
The Herders conducted a coin vote and a miner vote and in both surveys found overwhelming support for implementing ProgPoW. After that, the group proceeded with the task of identifying a third party that could perform a technical audit of the algorithm and decided upon Least Authority, a security consulting firm that has previously audited Ethereum and Zcash.
As a result, any final decision on ProgPoW will be made after the audit, at which point the Ethereum community can have one last go at deciding whether or not to decisively fight against ASICs in the waning era of ether mining.
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