The PoW Landscape in the Aftermath of The Merge

TL;DR

This paper analyzes how Ethereum miners redirected their computational resources to other proof-of-work networks after Ethereum's transition to proof-of-stake, revealing significant hashrate shifts and ongoing power consumption.

Contribution

It provides the first detailed analysis of miner behavior and network hashrate changes following Ethereum's transition from PoW to PoS.

Findings

At least 41% of Ethereum's pre-merge hashrate migrated to other PoW networks.

12% of the migrated hashrate remained more than 5 months after the merge.

Miner profitability decreased by nearly an order of magnitude post-merge.

Abstract

On 15th September 2022, The Merge marked the Ethereum network's transition from computation-hardness-based consensus (proof-of-work) to a committee-based consensus mechanism (proof-of-stake). As a result, all the specialized hardware and GPUs that were being used by miners ceased to be profitable in the main Ethereum network. Miners were then left with the decision of how to re-purpose their hardware. One such choice was to try and make a profit mining another existing PoW system. In this study, we explore this choice by analyzing the hashrate increase in the top PoW networks following the merge. Our findings reveal that the peak increase in hashrate to other PoW networks following The Merge represents an adoption of at least 41% of the hashrate that was present in Ethereum, with 12% remaining more than 5 months later. Though we measure a drastic decrease in profitability by almost an order of magnitude, the continued presence of miners halts claims that power consumption was instantly addressed by Ethereum's switch to PoS.