Ether Miners in China Continue to Expand Mining Operations as Ethereum’s Constantinople Hard Fork Approaches
Ethereum miners are waiting anxiously for the Constantinople upgrade which is predicted to occur on Wednesday, January 16. Despite a lot of uncertainties around the system-wide upgrade, some miners in China are now planning to expand their Ethereum mining operation in places with plentiful hydropower in readiness for a rainy season which could see a drop in the mining costs, according to Odaily.
Ethereum’s upcoming Constantinople hard fork which combines a total of 5 five ethereum improvement proposals (EIPs) is expected to significantly improve the performance of the network and to simplify the process of creating decentralized applications(DApp).The fifth upgrade, EIP-1234, will decreases block mining rewards from 3 ETH to 2 ETH per block.
Yet the reduced mining reward has not become a worry for those miners equipped with tens of thousands of machines.
An Ethereum miner named Wang Zelin (pseudonym) told Odaily that his mining farm which has tens of thousands of mining rigs has not made any short-term adjustment ahead of the Constantinople hard fork because he thought the event would not cause crypto market’s volatility.
Wang is still building mining farms in southwest China with cheap hydropower before the rainy season, rather than downsize the operation in the face of dwindling mining rewards.
Chen Lei, head of Blockchain Club at Peking University and a mining farm operator, is less optimistic about the survival of miners after the hard fork. He said although the rainy season in southwest China will lower the energy costs for miners,ethereum’s mining difficulty in the long term will increase and the reduced mining rewards will pull unit profits down.
“20% to 30% of Ethereum miners will be affected by the Constantinople upgrade,” Chen said, adding that once the hard fork activated, those mining rigs which work inefficiently with huge energ consumption will be forced to shut down just as what happened last November when the price of Ether hit a new low.
Qiu Xiaodong, a key account manager of an ethereum mining pool called Sparkpool that supports over 10 percent of the ethereum hashrate, said 760,000 GPU miners left the Ethereum network in November 2018 when the price of Ether fell below $150 and the computing power of the network dropped to around 160T.
Although the hard fork will not send large mining farms supported by sufficient capital and resources out of business in the short term, some people in the industry claim the only way smaller miners to get on is switching to mine smaller altcoins. Further, some smaller miners will sell graphics cards and old equipment off to make ends meet if the Ether’s price drops even further.
What to expect from the ethereum’s hard fork? Chen Lei said the it is highly unlikely to induce the type of chain split and Ether holders will not get a new coin if the upgrade processes as planed. He predicted the market would remain stable ahead of the hard fork, but crypto prices may go down after it.