Cryptocurrency miners are turning to artificial intelligence and cloud computing as Ethereum begins the Merge. Ethereum’s Upgrade from traditional PoW to the new PoS will make it energy efficient. However, the Upgrade will render miners jobless. The miners will remain with a lot of computational equipment than they will know what to do with. Many are looking to cloud computing and artificial intelligence as alternate sources for revenue generation.
HIVE, a blockchain that trades on Nasdaq, said yesterday that it is testing its equipment for cloud computing. The firm is working on a project with Tier 3, a data center. Cloud computing equipment requires heavy machinery for data storage, machinery. Centers like Tier 3 need multiple power sources with machines functioning, although; there is no shutting down. Because cryptocurrency equipment meets these requirements, cloud computing is a good option.
The Vancouver-based Canadian company has been using Nvidia processors to mine Ether. These graphic processing units (GPUs) can store large sets of data, which can also be used for AI acceleration and virtual simulation.
Another cryptocurrency mining company, Hut 8 Mining (HUT), announced that it is moving to cloud computing and AI. In August, the company announced that it completed the installation of 180 NVIDIANVDADIA GPUs in its data center in Kelowna, British Columbia. HUT aims to repurpose these machines to provide customers with machine learning, artificial intelligence, and VFX rendering services.
Why are Miners Turning to Cloud Computing and Artificial intelligence?
The Ethereum Merge will render Ethereum mining useless. Because miners have giant firms and purchased mining equipment that is not easy to sell, the miners have to find something helpful to do with the kit. Another reason is a reduction in profit following the persistent bear market in the cryptocurrency space. This year has been harsh for cryptocurrency. Publicly traded cryptocurrency stocks have been hit hard this year. Companies like HIVE and Hut 8 have lost market shares by 60%.
Ethereum miners generated about $19 billion as profit in 2021 alone. To recover lost revenue, other companies, including HIVE, are considering mining alternative crypto coins that require Proof-of-Work, for example, ETC. Other miners came together to form a hard fork of Ethereum, ETHW. These miners are against Ethereum PoS Upgrade and resolved to find ways to keep mining Ethereum. The downside is that these crypto coins have a smaller market capitalization than Ethereum.
Could the Merge be a Positive Thing for Ethereum Miners?
An advantage of the Merge is that GPUs will flood the resale market. Another advantage is that PoW cryptocurrencies will remain profitable, with only a small number using cheap energy. One analyst, Sami Kassab, says:
“Miners willing to invest the time and additional capital will be able to transition into high-performance data centers or node operators/providers for Web3 compute protocols — both rapidly growing markets.”
Therefore, even though the Ethereum Merge has its downside for miners, it creates a positive challenge. Miners must think out of the box to recover lost revenue and find other opportunities to generate income.