The mining method has changed from using graphics cards to owning Ethereum

On September 15, there was the biggest cryptocurrency event in the second half of this year. 바이빗 One of the Ethereum 2.0 updates is the “The Merge” upgrade. As a result, the current method of mining Ethereum has been changed to a PoW method that can be rewarded by solving operations while consuming huge amounts of power with expensive graphics card equipment, but a PoW method that can be rewarded as a validator if you have Ethereum.

In other words, the mining method has changed from using graphics cards to owning Ethereum. To receive compensation from the changed equity certification method, you need a computing environment that maintains access 24 hours a day, 32 Ethereum (about 60 million won), and technical knowledge to run the verifier program


It is not easy for ordinary people who lack knowledge in computers to receive actual Ethereum mining compensation even after the update. For this reason, there have been many services that replace Ethereum equity certification for ordinary people so that they can receive Ethereum mining compensation even if they do not own Ethereum or have technical knowledge of the verifier program.

Like a fund of securities, it’s a method of receiving a small amount of Ethereum that each individual has, acting as a verifier with Ethereum gathered, and providing Ethereum mining compensation to depositors according to the ratio deposited. Of course, there is an agency fee.

However, due to the mining compensation method that only requires Ethereum to be owned, individuals’ Ethereum is flocking to large companies, raising another concern as large Ethereum holding institutions such as Lido and Coinbase account for a higher proportion of the total Ethereum block generation.

Steakings service, “Lido”

In fact, 42% of the blocks created immediately after the Ethereum merge update were created by two Lido and Coinbase. Currently, several operators are known to have more than 60% of the total Ethereum amount.

This means that “centralization” by these large holding institutions has become a reality. If several large companies monopolize Ethereum mining compensation, they will be able to decide how Ethereum operates on their own, which is in direct violation of the decentralization ideology of the blockchain.

In addition to the risk that these companies arbitrarily decide how they operate, there is also a possibility that they will be controlled by government censorship. This is actually happening.

On August 8, the U.S. Treasury Department banned the use of the “Tornado Cash” service and placed 44 addresses of related agencies on the sanctions list. The “Tornado Cash” service is a mixing service that mixes the transaction details of virtual currency so that it is not known who sent it. In short, we are openly offering money laundering as a service. In fact, about 75% of cryptocurrencies stolen by hacking from the blockchain over the years have been laundered through the “Tornado Cash” service. Lazarus, a hacker organization affiliated with North Korea, also laundered funds through the service.

If governments in each country demand large institutions such as Lido and Coinbase to censor the transaction for reasons such as anti-money laundering, and institutions implement it, the operation of the blockchain with the idea of decentralization will be centralized, and government imposition will work.

In response, companies are in a position to find censorship measures because they have no choice but to comply with the government’s demands, while communities are in a position to resist various censorship.

The community’s position is that sanctioning the “code” that causes the protocol to return violates the “freedom of expression.” The programmer who wrote the code for the “Tornado Cash” service has been arrested in the Netherlands.

In addition, Ethereum’s core developers are also opposed to censorship. They say that if the verifiers of the equity certification method do not verify transactions on the regulatory list in response to government sanctions, they may deal with them by implementing a kind of penalty, equity reduction. In Ethereum, which is an equity certification method, if malicious verification occurs, a large portion of the Ethereum held is excluded from the community, and if the amount of Ethereum held is less than 16 Ethereum, you will lose your qualification for verification. However, there are many positions that this is also an unfair deprivation of individual ownership and not a valid sanction for verifiers participating in censorship.

However, it is clear that whether it is a leader, coinbase, or binance, it must be based on a specific country and be subject to criminal laws and various administrative laws based on each country’s vulgarism. In particular, this year, countries are starting various investigations and sanctions as if they are looking for Binance, the world’s largest exchange.

Is it really difficult to realize the decentralization ideology? Will a system be realized where there is no central control agency and there is no intermediary in the middle, where ownership is proved between individuals, goods are traded, and compensation is made? Everyone’s goal is decentralization, including web 3.0, metaverse, and NFT, which is the key element that moves it. With this Ethereum update, once again, decentralization is not easy.

Maybe we’re really passing through the middle of a big paradigm shift of the times.