A significant shift occurred in the Ethereum network on September 15, 2022, when it transitioned to a proof-of-stake (PoS) consensus mechanism. This transition marked the end of its reliance on proof-of-work (PoW) mining using general-purpose graphics processing units (GPUs), a system Ethereum had utilized since its launch on July 30, 2015.
Although Bitcoin remains the predominant user of PoW, the cessation of GPU mining on Ethereum led to the dispersal of these resources across various smaller blockchain networks and integrated computing platforms. This analysis explores that movement, highlighting the key PoW networks of 2025, the economics of mining, emerging hotspots, and the reasons why cost-effective security makes PoW a continually validated system.
The Impact of the Ethereum Merge
Understanding Proof-of-Work vs. Proof-of-Stake
Proof-of-Work (PoW) necessitates miners to solve intricate cryptographic puzzles through intensive computational hashing. This process secures the Bitcoin network, making block creation expensive in terms of computing power. In contrast, Proof-of-Stake (PoS) replaces computational work with financial investment. Validators stake their native tokens as collateral and are then randomly selected to create blocks, significantly reducing energy consumption.
The Departure of GPUs
The Ethereum PoW network achieved its highest hash rate, approximately 1.24 PH/s (petahashes per second), around mid-June 2022. The Merge on September 15 effectively deactivated over 1.2 PH/s of GPU-based mining capacity.
In the following weeks, GPU processing power largely shifted to these four prominent PoW blockchains:
-
Ethereum Classic: Increased from 26 TH/s to 236 TH/s, a substantial 808% growth.
-
Ravencoin: Saw a rise from 2.76 TH/s to 16.88 TH/s, reflecting a 511% increase.
-
Ergo: Experienced a jump from 14.46 TH/s to 99.59 TH/s, marking a 589% growth.
-
Flux: Expanded from 1.34 MH/s to 9 MS/s, showing a 571% improvement.
The decommissioned GPUs couldn’t transition to Bitcoin mining because Bitcoin’s SHA-256 PoW algorithm relies on Application-Specific Integrated Circuit (ASIC) chips, rendering GPU mining unprofitable. Consequently, miners moved to four GPU-optimized algorithms:
-
Ethash (Ethereum Classic): A memory-intensive algorithm designed to discourage ASICs, thereby maintaining the profitability of GPU setups.
-
KAWPOW (Ravencoin): Employs constantly changing calculations to ensure GPUs remain competitive and to resist specialized mining hardware.
-
Autolykos v2 (Ergo): Structured to allow straightforward GPU operations, making mining accessible without dedicated hardware.
-
ZelHash (Flux): Designed exclusively for GPU mining, optimizing energy efficiency and profitability.
PoW Blockchain Success Stories
Kaspa (KAS)
Kaspa is positioned as an alternative to Bitcoin, marketing itself as the “digital silver” compared to Bitcoin’s “digital gold.” The name “Kaspa” originates from an ancient Aramaic word for “silver” or “money,” highlighting their complementary relationship.
Technically, Kaspa operates on the GHOSTDAG protocol, supporting rapid transaction speeds and creating one block per second. They aim to scale further, potentially reaching 10 to 100 blocks per second.
Monero (XMR)
Launched in 2014, Monero prioritizes user privacy and fungibility, ensuring transaction anonymity through technologies like ring signatures and stealth addresses. Monero utilizes RandomX , a PoW algorithm developed by Monero contributors and integrated since release 0.15. Monero ensures fast, inexpensive transactions that are resistant to censorship and interference.
Ravencoin (RVN)
Ravencoin was launched on January 3, 2018, as an open-source fork of Bitcoin designed for peer-to-peer asset transfers. Key features include a 21 billion coin supply, one-minute block intervals, and an initial issuance of 5,000 RVN per block. Its mining algorithm, KAWPOW, uses GPU memory and computational resources to prevent ASIC centralization.
Ergo (ERG)
Ergo, launched in July 2019, employs the Autolykos algorithm optimized for GPU mining. Additionally, Ergo offers advanced smart contract capabilities and privacy tools, establishing it as a versatile platform for decentralized applications.
Flux (FLUX)
Flux is a mineable PoW cryptocurrency powering a decentralized cloud infrastructure designed for Web3. Flux supports diverse applications, including payments for resources, collateralizing FluxNodes, and enabling transactions on FluxOS. With over 13,500 nodes and significant computing capacity, Flux manages one of the largest decentralized networks globally.
Current Mining Economics
Mining profitability is contingent on several factors: token price, network difficulty, and electricity costs. While ASIC-based Bitcoin mining can remain profitable at an industrial scale due to its energy efficiency and access to lower power rates, GPU mining is more susceptible to changes in token value and energy prices.
Following Ethereum’s transition from PoW, GPU demand decreased significantly, resulting in hardware decommissioning and industry consolidation. Currently, most miners participate in mining pools to mitigate income variability, as solo mining on smaller PoW chains is riskier and often leads to delayed or inconsistent returns.
Geographical Changes & Regulatory Environment
As Bitcoin’s hash rate continues to grow, mining operations worldwide have strategically relocated to regions with favorable energy costs and clear regulations. Paraguay, for instance, has become a South American mining center due to low hydroelectric rates from the Itaipu Dam, accounting for up to 1.45% of the global hash rate in mid-2025.
Similarly, Kazakhstan experienced an influx of miners after China’s 2021 ban, attracted by deregulated energy and large-scale storage facilities. In Africa, countries such as Ethiopia, Kenya, and Nigeria are utilizing local renewable resources, including hydropower, mini-grids, and solar power, to support mining operations and community infrastructure, indicating a trend toward decentralizing hash power into emerging markets.
How Altcoin Miners Manage Energy Politics and Global Regulation
Beyond Bitcoin, GPU-based altcoin miners are also adapting to energy politics and compliance requirements. With increasing regulatory pressure in the U.S. and Europe, many are relocating to regions with less stringent oversight or surplus energy.
GPU miners are adjusting to regional energy conditions, with some engaging in solar partnerships or utilizing low-cost rural power sources to remain viable. In Paraguay, GPU farms are partnering with solar grid operators, while in the Middle East, miners are converting flared gas for efficient energy use. These adaptations demonstrate a trend where policy, energy economics, and decentralized infrastructure are becoming closely integrated.
Dual-Use Computing Applications
As mining profits decrease, operators are repurposing their infrastructure for dual-use applications. Hive Digital Technologies, for example, uses its GPU arrays for machine learning tasks during crypto market downturns. These GPUs revert to PoW mining when token prices increase, creating a flexible model that balances blockchain validation with AI computing contracts, enhancing capital efficiency and reducing reliance on fluctuating mining revenues.
TerraVerde Energy is integrating Bitcoin mining with solar infrastructure via real-time optimization software. This model dynamically reallocates surplus solar power between the grid, battery storage, and mining hardware, maximizing profitability by minimizing energy waste.
PoW’s Long-Lasting Security Framework
Despite environmental concerns, PoW remains the most tested consensus mechanism for decentralized systems. Here’s why PoW continues to be a reliable standard for trustless validation:
-
Externally Verifiable Work: PoW requires actual, measurable computation, making fraud and manipulation extremely difficult.
-
Censorship Resistance by Design: Disrupting block production requires attackers to expend significant energy and capital, rendering censorship economically unfeasible under PoW.
-
Permissionless Participation: Anyone with access to standard hardware can participate in mining, reducing centralization and gatekeeping.
-
Proven Resilience at Scale: Bitcoin’s hash rate, exceeding 0.8 Billion TH/s, provides real-time evidence of PoW’s unparalleled security and the scale of global miner engagement.
Conclusion
PoW remains the most battle-tested and censorship-resistant consensus method in the cryptocurrency space. Alternative miners are innovating through necessity, adopting solutions from solar-powered rigs to AI-integrated clusters, to minimize costs.
The Ethereum Merge pushed GPU miners to adapt, creating new dynamics across smaller PoW networks and mixed computing models. While Bitcoin’s ASIC mining dominates in scale and security, smaller chains like Kaspa, Monero, and Ravencoin have become innovation hubs and foster community-driven resilience. Alternative mining does not compete with Bitcoin but focuses on adaptability and localized utility.