A significant shift occurred in the Ethereum ecosystem on September 15, 2022, when it transitioned to a proof-of-stake (PoS) consensus mechanism. This change marked the end of Ethereum’s reliance on proof-of-work (PoW) mining, which had been in place since the network’s launch on July 30, 2015, and heavily depended on general-purpose graphics processing units (GPUs).
While Bitcoin continues to be the dominant force in the PoW arena, the exodus of GPU mining farms from Ethereum has led to their dispersal across various smaller blockchain networks and integrated computational platforms. This analysis explores the journey of these displaced mining operations, highlighting the key PoW networks expected to lead in 2025, examining the economics of mining, identifying emerging hotspots, and explaining why security driven by cost efficiency remains a crucial aspect of PoW’s robustness.
The Ethereum Merge: What Happened Next
Understanding Proof-of-Work and Proof-of-Stake
Proof-of-Work (PoW) requires miners to solve complex mathematical puzzles by performing extensive hashing computations. This process is vital for securing the integrity of the Bitcoin network, as it makes the creation of new blocks computationally expensive. Conversely, Proof-of-Stake (PoS) replaces this computational effort with a financial commitment. Validators stake their native tokens as collateral and are then randomly selected to produce new blocks, significantly reducing energy consumption.
The Great GPU Migration
Ethereum’s PoW network reached a maximum hash rate of approximately 1.24 PH/s (petahashes per second) around mid-June 2022. When the Merge concluded GPU mining on September 15, a substantial 1.2 PH/s of hash rate was effectively removed from the network.
In the weeks following the Merge, the GPU hash power was redistributed among four prominent PoW blockchains:
-
Ethereum Classic: Experienced a surge from 26 TH/s to 236 TH/s, an increase of 808%.
-
Ravencoin: Grew significantly from 2.76 TH/s to 16.88 TH/s, a 511% increase.
-
Ergo: Saw its hash rate jump from 14.46 TH/s to 99.59 TH/s, representing a 589% increase.
-
Flux: Increased from 1.34 MH/s to 9 MS/s, a 571% increase.
These GPUs could not transition to Bitcoin mining because Bitcoin’s SHA-256 PoW algorithm relies on application-specific integrated circuit (ASIC) chips, rendering GPU mining unprofitable. Instead, miners opted for four GPU-friendly algorithms:
-
Ethash (Ethereum Classic): A memory-intensive mining algorithm designed to prevent the dominance of ASICs and ensure the profitability of GPU mining rigs.
-
KAWPOW (Ravencoin): Employs regularly changing calculations to maintain GPU competitiveness and prevent the use of specialized mining equipment.
-
Autolykos v2 (Ergo): Designed for straightforward GPU operations, making mining accessible without the need for specialized hardware.
-
ZelHash (Flux): Specifically tailored for GPU mining, optimizing for both energy efficiency and profitability.
Top Proof-of-Work Blockchains Today
Kaspa (KAS)
Kaspa is positioned as an alternative to networks like Bitcoin, promoting itself as a “digital silver” to Bitcoin’s “digital gold.” The name “Kaspa” comes from the ancient Aramaic word for “silver” or “money,” highlighting this complementary relationship.
From a technical perspective, Kaspa is built upon the GHOSTDAG protocol, enabling rapid transaction speeds and the creation of one block per second. The network aims to scale even further, potentially reaching 10 or even 100 blocks per second.
Monero (XMR)
Launched in 2014, Monero places a strong emphasis on user privacy and fungibility, ensuring transactions remain anonymous through the use of ring signatures and stealth addresses. Monero employs RandomX, a PoW algorithm developed by Monero contributors and integrated since release 0.15. Ultimately, Monero facilitates fast and affordable transactions that remain free from interference or censorship.
Ravencoin (RVN)
Ravencoin was launched on January 3, 2018, as an open-source fork of Bitcoin designed specifically for peer-to-peer asset transfers. Key parameters include a 21 billion coin supply, one-minute block intervals, and a distribution schedule starting at 5,000 RVN per block. The mining algorithm, KAWPOW, utilizes GPU memory and compute cycles to discourage ASIC centralization.
Ergo (ERG)
Ergo, launched in July 2019, uses the Autolykos algorithm, which is optimized for GPU mining. In addition, Ergo supports advanced smart contracts and privacy tools, making it a versatile platform for decentralized application development.
Flux (FLUX)
Flux is a mineable PoW cryptocurrency that powers a decentralized cloud infrastructure for Web3. Flux supports numerous applications, including paying for resources, collateralizing FluxNodes, and executing transactions on FluxOS. With more than 13,500 nodes and substantial computing power, Flux operates one of the largest decentralized networks worldwide.
Current Mining Economics
Mining profitability depends on several factors, including the price of the token, network difficulty, and electricity costs. While ASIC-based Bitcoin mining can remain profitable at an industrial scale due to energy efficiency and access to preferential power rates, GPU mining is more susceptible to fluctuations in token value and energy pricing.
After Ethereum transitioned away from PoW, the demand for GPUs decreased dramatically, causing a wave of hardware decommissioning and consolidation. Today, most miners use mining pools to reduce income variability, as solo mining on smaller PoW chains is highly risky and often leads to delayed or inconsistent returns.
Shifting Locations & Regulatory Landscape
As Bitcoin’s hash rate continues to rise, global mining operations have been strategically relocating to regions with favorable energy conditions and clear regulatory frameworks. Paraguay, for example, has become a significant mining hub in South America due to ultra-low hydroelectric rates from the Itaipu Dam, hosting up to 1.45% of the global hash rate in mid-2025.
Similarly, Kazakhstan experienced a surge in mining operations following China’s 2021 ban, attracted by deregulated energy and large-scale warehouse availability. In Africa, countries like Ethiopia, Kenya, and Nigeria are using local renewable energy sources, such as hydropower, mini-grids, and solar power, to support mining clusters and local infrastructure, demonstrating a move toward decentralizing hash power into emerging markets.
How Altcoin Miners Adapt to Energy Politics and Regulation
Outside of Bitcoin, GPU-based altcoin miners are also adjusting to energy politics and regulatory requirements. With increasing regulatory pressure in the U.S. and Europe, many operations are moving to regions with less strict oversight or surplus energy.
GPU-based miners are adapting to regional energy landscapes by partnering with solar providers or leveraging low-cost rural power sources. In Paraguay, GPU farms are collaborating with solar grid operators, while in the Middle East, miners are using flared gas for energy. These adaptations highlight a trend where policy, energy economics, and decentralized infrastructure are becoming increasingly interconnected.
Models for Dual-Purpose Computing
As mining profits decline, operators are repurposing their infrastructure for dual-use applications. For example, Hive Digital Technologies uses its GPU arrays for machine learning tasks during crypto market downturns. These GPUs switch back to PoW mining when token prices rise, providing a flexible model that balances blockchain validation with AI computing contracts. This approach improves capital efficiency and reduces dependence on volatile mining revenues.
TerraVerde Energy is integrating Bitcoin mining with solar infrastructure through real-time optimization software. By dynamically shifting surplus solar power between the grid, battery storage, and mining hardware, this model ensures profitability by minimizing energy waste.
Why Proof-of-Work Still Matters for Security
Despite environmental concerns, PoW remains the most thoroughly tested mechanism for decentralized consensus. Here’s why PoW is still the preferred choice for trustless validation:
-
Externally verifiable work: PoW requires real, measurable computational effort, making fraud and manipulation virtually impossible.
-
Censorship resistance by design: To disrupt block production, an attacker must expend significant energy and capital, making censorship economically unfeasible under PoW.
-
Permissionless participation: Anyone with access to standard hardware can participate in mining, reducing the risk of centralization and gatekeeping.
-
Proven resilience at scale: Bitcoin’s hash rate, exceeding 0.8 Billion TH/s, provides real-time evidence of PoW’s unmatched security and the global scale of miner participation.
In Conclusion
Proof-of-Work remains the most tried-and-true, censorship-resistant consensus mechanism in crypto. Alternative miners are innovating out of necessity, from solar-powered setups to AI-integrated clusters, in order to reduce costs.
The Ethereum Merge compelled GPU miners to adapt, creating new dynamics across niche PoW networks and hybrid computing models. While Bitcoin’s ASIC mining dominates in scale and security, smaller chains like Kaspa, Monero, and Ravencoin have become centers for experimentation and community-driven resilience. Alternative mining is not competing with Bitcoin but adapting and focusing on flexibility and local utility.