Should Ethereum miners be concerned about EIP-3554?

The planned Ethereum Improvement Protocol (EIP)-3554 deployment is designed to render proof-of-work mining obsolete. In order to attain this purpose, it is set to detonate a difficulty bomb.

This will make ETH mining nearly impossible and will compel miners to upgrade their computers. However, the fundamental question is whether or not people should be concerned. Given the consequences of the EIP-1559 launch, the response may come as a surprise.

Ethereum gas fee burn debate

In the last 24 hours, the total value of ETH burnt inched closer to $1 billion. In fact, at press time, it was just short of $20 million, a level it will definitely achieve by the end of the day since daily burn averages around $24 million.

Total ETH burned till date | Source: The Block

Now, it is clear that the concern around EIP-1559 affecting the miners is no longer a point of discussion. Since the restructuring of fees on 4 August, miner revenues have grown exponentially, with the same hiking by 134%.

Despite the fee burn, however, transactions on the network alone managed to push miners’ revenue to a peak of $106.51 million on 10 September. The figures were only $24 million short of its ATH in May.

Ethereum miners’ revenue up by 134% | Source: The Block

Surprisingly, as of press time, transaction fees represented almost 80% of the total miner revenue.

How so?

This has been the case primarily due to consistent transactions on the chain, which have been steady above the 1.1 million mark for over 3 months now. They have remained unshaken by both, the rally and the crash.

Ethereum daily transactions are above 1.1 million | Source: The Block

In fact, yesterday, owing to increased transactions and an increasing number of miners, the hash rate reached an all-time high of 715k GH/s. Consistency similar to the transaction counts can be seen in the daily gas usage as well.

Gas used has been above 100 billion Gwei since August, peaking at 101.115 billion on 5 September.

Ethereum Hash Rate at ATH | Source: Etherescan

OpenSea has been the most significant contribution to this significant gas use. Over the last month, the top customer spent 36.35k on gas. This was caused by the rise of the NFT movement and its related hype.

In fact, NFTs worth $1.5 billion have already been sold this month. They were sold for $3.4 billion in the previous month.

OpenSea (NFT) is the biggest gas consumer on the network | Source: The Block

Because anxieties and apprehensions concerning EIP-1559 were proven to be unfounded, it is only fair to avoid making assumptions about EIP-3554 as well. Any additional evaluation will have to wait until December and another month following installation.

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