Ethereum hard forks are imminent, reducing block rewards for miners

Chris Dannen

By Chris Dannen


As part of an attempt to reduce its reliance on Proof-of-Work mining, the Ethereum network will hard fork today to reduce its block reward from 3 ETH to 2 ETH. A previous hard fork had already reduced the block reward from its original payout of 5 ETH to 3 ETH. When combined with worsening market prices, reductions in block rewards centralize the network by degrading the economics for smaller miners on the margins, who are subsequently driven out. Only large miners with the absolute lowest costs are left, making it easy for hashpower to cartelize or collude. Having built a small but die-hard community of "dapp" developers, it seems Ethereum's controllers are keen to consolidate their influence--but to what end?

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