What is EthereumPoW (ETHW)?

The world of cryptocurrency is a dynamic space, constantly introducing new concepts and projects. One such project is EthereumPoW (ETHW). As those familiar with crypto know, Ethereum’s (ETH) “The Merge” update was a monumental event. ETHW emerged directly from the heart of this transition, claiming to preserve the original spirit of Ethereum.

In this guide, we’ll dive deep into what EthereumPoW is, why it came into existence, its key differences from Ethereum, its future, and everything else you need to know about this unique ecosystem.

What Exactly is EthereumPoW (ETHW)?

Simply put, EthereumPoW (ETHW) is a cryptocurrency created by a group of people who refused to abandon the Ethereum blockchain’s Proof of Work (PoW) consensus mechanism.

To truly understand this, you need to grasp Ethereum’s monumental “The Merge” update. For years, Ethereum, like Bitcoin, operated on a Proof of Work (PoW) algorithm. In this system, miners used powerful computers to solve complex mathematical problems to validate transactions and create new blocks—a process known as “mining.”

However, Ethereum’s developers decided to switch the network’s consensus mechanism from PoW to Proof of Stake (PoS) to solve issues of scalability and high energy consumption. This transition, known as “The Merge,” took place on September 15, 2022. In the PoS mechanism, “validators” secure the network by “staking” or locking up their ETH, instead of using energy-intensive mining rigs. This system is far more energy-efficient than PoW and, in theory, offers faster transaction speeds.

This is where things diverged. Ethereum miners and a segment of the community loyal to PoW opposed this change. Fearing that their costly mining hardware would become obsolete, this group decided to continue the original PoW chain through a “hard fork.” The new chain that resulted from this fork was named “EthereumPoW,” and its native cryptocurrency was called “ETHW.”

In essence, ETHW is a one-to-one copy of the pre-“Merge” Ethereum, with the key difference being that its consensus mechanism remains PoW. All data, smart contracts, and tokens from the moment of the fork were replicated onto the new ETHW chain. This meant that anyone who held Ethereum (ETH) before the fork automatically received the exact same amount of ETHW.

Why Did EthereumPoW Emerge?

To understand the emergence of EthereumPoW, we need to look at the motivations of those who opposed the switch to PoS. The main reasons are as follows:

a. Economic Concerns of Miners

Before “The Merge,” tens of thousands of miners worldwide had invested millions of dollars in specialised hardware like GPUs (graphics processing units) to secure the Ethereum network. Ethereum’s move to PoS would have rendered this hardware instantly useless. While switching to Bitcoin mining was an option for some, the equipment used for Ethereum wasn’t suitable for Bitcoin’s SHA-256 algorithm. For many miners, creating a chain that continued PoW was the most logical step. ETHW became a lifeline for their hardware.

b. Loyalty to the PoW Philosophy

One of the core philosophies of cryptocurrency is decentralisation. PoW supporters believe that the mining mechanism provides better network security and a more decentralised structure. In their view, PoS gives more power to those who stake large amounts of tokens, which could lead to a form of centralisation. They also argue that PoW is more resistant to censorship and offers fairer block creation.

c. Continuation of Blockchain History

Ethereum’s first major fork, Ethereum Classic (ETC), had a similar story. After the 2016 DAO hack, the Ethereum community hard-forked to reverse the effects of the hack, but some saw this as “changing blockchain history.” ETC was created by those who stayed true to this belief. ETHW adopted a similar approach, aiming to preserve the “original” PoW chain of Ethereum as a historical record.

The Core Differences Between ETHW and ETH

Here’s a summary of the key distinctions between ETHW and ETH:

Consensus Mechanism: This is the most significant difference. ETHW uses Proof of Work (PoW), while ETH uses Proof of Stake (PoS).
Transaction Speed and Costs: In theory, PoS offers faster and cheaper transactions than PoW. However, ETHW proponents argue that PoW is more secure.
Energy Consumption: ETHW has high energy consumption due to the mining process. ETH’s move to PoS drastically reduced its energy consumption by over 99%, a crucial difference for environmentally conscious investors.
Ecosystem Support: Ethereum (ETH) has a massive ecosystem with extensive support from DeFi protocols, NFT marketplaces, dApps, and corporate partnerships. ETHW has failed to garner a significant portion of this support, as most developers and projects chose the PoS chain. This has left the ETHW ecosystem much more limited compared to ETH.
Inflation Rate: ETHW continuously creates new token supply through mining rewards, whereas ETH’s inflation rate has fallen sharply since the move to PoS, even becoming deflationary during some periods.

The Future of EthereumPoW and Its Risks

Since its inception, EthereumPoW has been a source of great curiosity and debate. While it’s impossible to predict its future with certainty, we can evaluate its potential opportunities and risks:

Potential Opportunities:

PoW Loyalists: If a loyal user base committed to the PoW philosophy forms, the value of ETHW could rise, attracting new projects to the chain.
Unique Applications: If new and innovative dApps are developed on the ETHW chain that either aren’t possible on PoS or benefit from PoW’s security, it could revitalise the chain.
Continued Mining: The continued support of miners in securing the network could create long-term value.

Potential Risks:

Lack of an Ecosystem: This is the biggest risk. The massive projects in the Ethereum ecosystem (like Uniswap, Aave, Compound, etc.) do not support ETHW. This makes it difficult for ETHW to provide sufficient use cases and liquidity for its users. A blockchain’s value is directly proportional to the number of dApps and users on it.
Security Issues: A drop in the network’s hashrate (mining power) could increase security risks like a 51% attack. If there isn’t enough mining support, the network’s security could weaken.
Price Volatility: Low trading volumes and decreasing interest could lead to severe price fluctuations for ETHW, making it a highly speculative asset.
“Secondary Chain” Perception: A large part of the crypto community views ETHW as a “secondary” version of the main Ethereum chain. This perception could hinder its long-term growth.

How to Acquire EthereumPoW?

If EthereumPoW (ETHW) has caught your interest and you want to own some, there are a few ways to do so:

Cryptocurrency Exchanges: Many centralised crypto exchanges (such as Gate.io, MEXC, Kraken, OKX, and others) list ETHW, allowing you to buy and sell it. You can usually find trading pairs with USDT, ETH, or other cryptocurrencies. It’s important to choose a reputable and high-volume exchange.
Mining: If you have mining hardware, you can mine EthereumPoW to earn ETHW. However, you should consider the necessary hardware and electricity costs.
Pre-“Merge” ETH Ownership: Anyone who held ETH before “The Merge” automatically became eligible for the same amount of ETHW tokens. These tokens are located at the same address where your ETH was held. If your ETH was on a centralised exchange, the exchange may have distributed the ETHW to you. If you held it in a personal wallet, you may need to connect to the ETHW chain to access these tokens.

Conclusion

EthereumPoW (ETHW) is more than just a cryptocurrency; it’s the embodiment of a fundamental debate within blockchain technology. On one side, there’s the main Ethereum chain, which embraced technological advancement and environmental sustainability by switching to PoS. On the other, there’s EthereumPoW, which stands for the superior decentralisation and security of PoW, aiming to preserve this legacy.

The future of ETHW will largely depend on the loyalty of its community, the ability of developers to bring new projects to the chain, and general market conditions. While it may have lost the support of the mainstream ecosystem, surprises are always possible in the world of crypto.