After Ethereum Merge, will there be an ETHPOW fork?

One of Ethereum’s major upgrades, called the Merge, will take place in less than a week. With this upgrade, Ethereum will switch its consensus protocol from Proof of Work (POW) to Proof of Stake (POS). 

This means that securing the Ethereum network will no longer require crypto mining hardware. While many investors, including Ethereum mining companies, look forward to this historic change, some aren’t too keen about it.

Miners who reject Ethereum’s upgrade have sought to fork out of the popular version of the network. They’d keep an old copy of Ethereum and maintain the Proof of Work protocol — hence giving rise to an EthereumPOW network.

It’s important to note that at the time of writing, EthereumPOW is only a potential Ethereum fork. There’s very little concrete technical information of this fork, which you could consider as a small red flag. 

Continue reading as we explore some common questions about the EthereumPOW (ETHW) token.

Will every ETH holder get an ETHW airdrop?

EthereumPOW is an exact copy of the Ethereum blockchain up to a certain point in time. This means, technically, your account with your private keys on the EthereumPOW will have the same number of ETHW tokens as the ETH you’re currently holding.

But gaining access to ETHW tokens is another problem altogether. Firstly, the crypto wallet of your choice must support it if you ever want to access your ETHW tokens. 

The irony is that some custodial centralised exchanges have been open about supporting ETHW tokens for savvy traders and speculators.

However, non-custodial software wallets like Metamask, and hardware wallets like Trezor and Ledger have not released any statement regarding the support of the forked blockchain. 

If EthereumPOW fails to gain traction, there is very little chance that major exchanges, wallets, and DeFi protocols would ever interact with the EthereumPOW blockchain.

Now, let’s assume that you have a way of knowing which Ethereum wallet will support ETHW tokens. How do you take advantage of the Merge, and the creation of ETHW tokens in a specific exchange market?

While this question is beyond the scope of this guide, Coingecko COO Bobby Ong offers some insights in a Twitter thread on ETHW trading tactics.

What is Ethereum? Read our complete guide on Ethereum (ETH).

What’s the use of ETHW again?

This is a funny but smart question that deserves a deep dive. We first have to look into the minds of Ethereum miners. 

They’ve invested heavily into crypto mining equipment, and hoped that the ETH that they’ve been mining would give them a decent investment return.

Crypto mining is a complex balancing act. A change in policy, hardware market, and even the weather would have an impact on the miners’ profitability.

One more factor that will greatly impact their profitability is the mining difficulty. Embedded within Ethereum’s code is something called the Difficulty Bomb, which sets off very close to the Merge to make mining exponentially more difficult.

This is to force Ethereum miners to consider stopping their operations or change their business model to align with the Proof of Stake protocol.

Even the biggest Ethereum mining pools are making what they believe to be a more practical decision — to put Proof of Work mining in the past.

However, for the smaller mining pools at the tail-end of the computational power distribution, stopping their mining operation may not make much sense. So, they may come up with all kinds of reasons to continue the POW legacy.

For example, they may argue that Proof of Work is more secure and less centralised than the upcoming Proof of Stake.

They’d take Ethereum’s original code and goes as far as to remove the Difficulty Bomb to allow easier mining and the continuation of ETH (or rather ETHW) mining.

At the end of the day, it’s fair to assume that ETHW exists so that Ethereum miners can stay in business. After all, there is already a market for ETHW on some exchanges where speculating traders could make a profit from ETHW’s price volatility.

Proof of what? If you’re new to these terms, check out our guide on Proof-of-Work (PoW) and Proof-of-Stake (PoS).

Will ETHW threaten Ethereum’s network?

For over ten years, history has shown that forks have not done much harm on Bitcoin as well as Ethereum. 

Bitcoin peacefully coexists with five of its major forks (Bitcoin ABC, Bitcoin Cash, Bitcoin SV, Bitcoin Gold, and Bitcoin “Core”). Let’s say you count “spin-off coins” as Bitcoin forks (such as Dogecoin and Litecoin). Bitcoin will still happily dominate the market with its massive investor support. 

The same can be said for Ethereum. In 2016, the Ethereum community was split between doing what was morally acceptable (reversing a $60 million theft from the DAO Hack) and staying true to the ethos of decentralisation (and not reversing this hack).

As a result, Ethereum Classic (ETC) maintained an old copy of Ethereum, prior to the decision to override the blockchain. Both Ethereum Classic and Ethereum share the same transaction history up until that point.

Did this fork influence the price of Ethereum (ETH)? It is hard to tell for sure, as ETH’s price was still more volatile than it is today.

Today, however, Ethereum is ranked the second-biggest cryptocurrency in the world. Ethereum Classic ranks 17th biggest in terms of market capitalisation. 

The next logical question to ask is this:

With Ethereum Classic still maintaining the Proof of Work protocol, what would the proposed EthereumPOW network have to offer?

Should we be worried about EthereumPOW?

Now that we’ve gained a better understanding of what EthereumPOW (ETHW) is, we no longer need to worry about it. However, we should be wary of it.

When someone does have access to their ETHW tokens on an Ethereum wallet, they’d also have access to their duplicated NFT on the EthereumPOW blockchain.

If unaware of the EthereumPOW fork, they may mistaken the assets between the ETHPOW version with the Ethereum version. Popular crypto wallets, though, are usually optimised to avoid this confusion.

Furthermore, with the existence of EthereumPOW, and the free airdrop of ETHW, new scams may emerge. Please be wary of pump-and-dump schemes involving any crypto asset, especially ETHW, as they will be airdropped for free.    

As always, do your own research and stick to what you know for certain.