Just like bitcoin miners, ether miners have had their own ups and downs this year.

Community disputes have mainly settled on the protocol level, centering around some of the most aggressive breaking changes to any live network such as EIP 1559, MEV and The Merge.

Compass sat down with two of Ethereum’s best wielders of both the keyboard and mic to understand how the reverbs from these changes will shake out over the coming months. Read the summary below.

Ethereum miners should be ready for a swap.

Ethereum has long promised a transition away from Bitcoin’s proof of work to a security model based on staking coins. While this process has long been in the making, its delay has turned into somewhat of a meme among the mining community.

A finalized tech specification may be the thing to turn heads, however. A newly published EIP 3675 describes how the merge would attach the current network to the Beacon Chain’s valueless though functional skeleton. Developers are earnest in calls for a Q1/Q2 swap.

“We got quite a well defined spec. It’s all about testing and risk management. Technically there are no unknowns, it's about making everyone confident.” -- Ben Edgington

Miners may be interested in continuing the old chain via a fork. But it's unlikely to have any meaningful impact for a few reasons: 1) projects on Ethereum will only recognize the new chain 2) the old chain’s ether won’t have any value unless picked up by exchanges and 3) Ethereum Classic stands as an alternative Ethereum sticking to PoW.

“Unless we find an extraordinary number of DeFi and exchange applications signaling they wish to continue proof of work, everyone will exit the proof of work chain when we do the merge and it’ll be a ghost chain.” - Ben Edgington

Miner extractable value (MEV) is a big concern for Ethereum.

MEV has been the topic de jour among Ethereum developers and bag holders the last year, and for good reason. MEV stands as one of the greatest threats to any blockchain because it hurts the very thing blockchains are good at: assuring settlement.

MEV makes the tip of the blockchain – those last few blocks just mined and added to the chain – a battle ground even after finding a parent block. This is because the transaction value in that block can exceed the value of the block reward. Miners are naturally incentivized to extract that value under certain conditions via a short re-org of the chain.

Ethereum is a stateful chain, meaning there exists a common state of information stored on-chain (think contracts, accounts, balances, etc). People accessing the state often try to access the same part at the same time, such as two people going for an arbitrage trade on Uniswap at once. Typically, gas fees decide who gets what. But if miners understand their role as gatekeepers, they possess outsized powers over users.

“When you're writing these on-chain systems, the miners have super powers. MEV is when the miners exercise their exclusive rights to produce blocks and order transactions.” - James Prestwich.

As a recent Paradigm Research piece articulated, MEV may be one honest reason for Ethereum’s transition away from proof of work to proof of stake. Without a notion of “finality” as reasoned by Eth2, proof of work Ethereum could fall prey to its own success.

MEV isn’t really a concern for Bitcoiners.

Bitcoiners have little reason to worry about MEV – at least at this point.

Bitcoin operates on what is called a UTXO standard. The common analogy for explaining a UTXO set up is to spare change. Change typically swaps from one pocket to another without affecting the dollar bills in the wallet. All things equal, Bob’s bitcoin moving from wallet A to wallet B won’t change in value if Alice moves bitcoin from wallet C to wallet D.

Counter that with Ethereum and other smart contract chains that use account balance blockchains. Here, each account, balance and smart contract is stored similar to a credit card statement on a central ledger called the virtual machine. The ability to 1) see the state of the VM 2) make changes to the state that affect others and 3) bid for access leads to on-chain games called MEV.

“UTXOs have much more defined rules about who can spend them and when. This naturally decreases the amount of MEV in the system. The places that create MEV are applications where many users can interact with the same state.

“When we write a Bitcoin script, we have very concrete rules about who can spend it, under what circumstances, in which time frame and with which additional knowledge. All of those constraints are what make Bitcoin more resistant to MEV than Ethereum is or any other rich state chain.” - James Prestwich

Bitcoin should only be concerned about MEV once the chain begins to rely on transaction fees instead of the block reward for incentivizing miners. At that point, miners may be interested in re-orgs in order to extract additional value.