The Ethereum Foundation has confirmed that Ethereum's vaunted Merge is finally happening between Sept. 13 and 15.

Ethereum's long-awaited transition from the energy-intensive Proof-of-Work (PoW) consensus mechanism to the Proof-of-Stake (PoS) consensus mechanism will add more scalability and throughput to the network while overcoming the environmental challenges posed by PoW. It will also lay the foundation for Phase III of Ethereum's development roadmap, enabling developers to experiment with new scalability-focused technologies, such as sharding.

A multi-step process, Ethereum's ongoing transition from PoW to PoS kicked off with the London hard fork in Q3 2021. During this fork, the Ethereum development team introduced Ethereum's new PoS consensus layer — the Beacon Chain. After almost a year and a series of technical upgrades, the ongoing Bellatrix update marks the final step before The Merge is implemented.

Once The Merge is completed, Ethereum will officially adopt the Beacon Chain as its new consensus layer for its existing mainnet execution layer. With this, Ethereum's PoW consensus mechanism will come to an end, and the Ethereum network's energy consumption will decline by approximately 99.95%.

The Call for Another Hard Fork

Technically, a hard fork is a process through which an existing blockchain is split into two different blockchains. In the case of Ethereum, hard forks are proposed via Ethereum Improvement Proposals (EIP), most of which aim to implement significant changes to the mainnet code. As a result of a hard fork, a blockchain is split into two standalone chains, each with its own native tokens, consensus mechanisms and features.

The Ethereum community has had its experience with forks. In July 2016, the Ethereum network hard-forked into two different chains: Ethereum and Ethereum Classic. The latter was a totally different cryptocurrency and blockchain ecosystem catering to other technological and philosophical needs.

While the PoW to PoS transition aims to improve Ethereum's capabilities, especially in overcoming the limitations of the current PoW-based mechanism, The Merge will also stop the ETH mining process.

"The Ethereum Foundation blog has confirmed that mining is not possible after The Merge, so miners could choose to mine other Proof-of-Work cryptocurrencies like Litecoin and Zcash," Andrei Grachev, managing partner at DWF Labs, explained. "They may also choose to mine Ethereum Classic, which is a hard fork of the Ethereum network that was created in 2016."

So, What Happens if the Community Votes in Favor of Another Hard Fork?

ETH miners are on the verge of losing their mining income after The Merge, resulting in several new proposals floating around the community. Among them is the call for another hard fork to create an Ethereum PoW chain that allows ETH miners to reuse their hardware and generate money. Tron founder Justin Sun, prominent Chinese miner Chandler Guo and mining firms like Hive Blockchain are among the heavyweights backing the idea of a hard fork on the Ethereum chain before The Merge.

If the community approves another hard fork, Ethereum might split into two chains. One would be based on the PoS mechanism per The Merge, and the other would stick to the PoW mechanism, enabling miners to continue mining tokens. To that extent, Sun and Guo have proposed a new ETHPoW chain with its new tokens ETHW and ETHS, which has also received backing from BitMEX, Poloniex and several other crypto exchanges.

Stressing the core features of the PoW mechanism, Sun said in a CoinDesk interview that he believes PoW has its own unique value. "We may have underestimated the value of Ethereum as the only PoW smart contract blockchain. It is risky for Ethereum to move completely from PoW to PoS, and I don't think there is anything wrong with preserving the PoW chain for the Ethereum community," he explained.

What Happens if the Community Doesn't Vote in Favor of the Hard Fork?

There is no denying that ETH mining has been very lucrative over the past few years, mainly due to the growing popularity of decentralized finance (DeFi), non-fungible tokens (NFTs) and play-to-earn (P2E) games. Compared to the returns generated from ETH mining, other forked chains like Ethereum Classic don't offer anywhere near the same remuneration levels.

For instance, Ethereum Classic miners generated roughly $318 million in profits in 2021, representing just a tiny fraction of Ethereum's comparable $18.4 billion during the same period. Theoretically, most Ethereum miners will be out of work after The Merge. Given the extensive investments in mining equipment formerly required to compete in the mining, existing ETH miners would want to put their hardware to use. Despite Ethereum Classic's lackluster returns, the best option is to use the hardware to mine Ethereum Classic (ETC) tokens.

The other available workaround for ETH miners is to look for other PoW tokens they can mine with their Ethereum-mining hardware. Dogecoin and Monero are other viable alternatives, but they, too, don't offer the high revenues available from existing Ethereum mining. Moreover, considering the technicalities involved, switching to Ethereum Classic mining is probably the easiest choice for ETH miners.

"Forking Ethereum is achievable as seen with Ethereum Classic, but the probability of another sustainable successful fork is low," Grachev stressed. "We could see two PoW forks – one with the difficulty bomb and one without. The first wouldn't make sense since it increases block mining difficulty with lesser rewards, and the second is basically ETC. Since the token already has an established community, it's more likely that miners will turn to ETC instead."

(Sadie Williamson is the founder of Williamson Fintech Consulting.)

Experts predict Ethereum's price by mid-2018. David McBee/Pexels