Somewhat buried in ethereum’s big software makeover that rolled out Thursday is a code update known as Ethereum Improvement Proposal 3554, or EIP-3554 for short. It threatens to hasten the end of ethereum mining as we know it.
Since its launch, the ethereum community has talked about overhauling the way that it mints ether, which is the token associated with the ethereum blockchain. But getting people to make the change is going to require a push – and that push is something known as a difficulty bomb.
“It’s a mechanism in ethereum that makes it exponentially harder to mine,” said Tim Beiko, the coordinator for ethereum’s protocol developers. “It’s like we’re artificially adding miners on the network, which raises the difficulty, making it harder for every other miner that’s on the network to actually mine a block.”
EIP-3554 moves up the detonation date of that difficulty bomb by six months to December. Once it goes off, it will essentially make ethereum unmineable.
Ethereum 2.0
Cryptocurrencies like ethereum and bitcoin regularly receive flack for the process of mining, which is how new coins are generated. Both currently use a so-called “proof-of-work” mining model, where machines solve complex math equations to create new coins. This makes it impossible for any centralized body to create new coins arbitrarily – there’s no equivalent of a central government to print new dollars – which crypto enthusiasts believe helps preserve the value of these cryptocurrencies.
However, this effort requires significant energy to power the computers used to perform the calculations, which has drawn criticism from outsiders concerned about energy shortages and carbon emissions.
The ethereum community has coalesced around the idea of migrating from proof-of-work to “proof-of-stake,” which requires users to leverage their existing cache of ether as a means to verify transactions and mint new tokens. This will still limit the amount of new coin created, but without requiring the energy used to run massive banks of computers to solve math equations.
Beiko tells CNBC the original proposal required these so-called validators to have 1,500 ether, a stake now worth around $4.2 million. To lower the barrier to entry, the new proof-of-stake proposal would only require interested users to have 32, or about $90,000.
“It’s still not a trivial sum, but it’s a much more accessible system,” said Beiko.
Since December 2020, the ethereum community has been testing out the proof-of-stake workflow on a chain called Beacon.
Though proof-of-stake has been the plan for ethereum since the outset, developers have pushed back the rollout, because they had seen serious flaws in previous implementations. Beacon solves these problems, according to Beiko.
“We knew that there would be a lot of technical work to address things like the increased centralization that we see in other proof-of stake-systems,” he said. “We’ve achieved that with the Beacon chain, where there’s one or two orders of magnitude more validators…than any other proof-of-stake networks.”
Migrating the entire ethereum ecosystem to Beacon, an upgrade being dubbed “ethereum 2.0,” is the next step in the process. Getting everyone on board with the move is where the difficulty bomb becomes significant.
The Ice Age
This isn’t the first time in ethereum’s history that a difficulty bomb has detonated.
It’s happened a few times, including in 2017, 2019, and again last year.
When a difficulty bomb detonates, it floods the system with artificial miners, driving up the mining difficulty. That means new blocks will appear more and more slowly on the network. “If you increase the difficulty really, really quickly, it’s just not profitable for new miners,” explained Beiko.
But each time it’s gone off, the community has reset the clock in order to bring the difficulty level back down to normal levels.
Etherscan.io
While you don’t need a bomb to go off to roll out proof-of-stake mining, it certainly helps move things along by closing the on-ramp to proof-of-work mining. Beiko calls it more of a stopgap measure.
In essence, the point of the difficulty bomb is to force miners and node operators to upgrade their software after a predetermined amount of time has passed, according to Nic Carter, Castle Island Ventures general partner and Coin Metrics co-founder.
In December, if the deadline for detonation isn’t pushed back, the bomb will go off, and you’ll see another parabolic rise in difficulty, like the ones pictured in the chart above. But this time, developers won’t be rewinding the clock.
It will be the start of ethereum’s proof-of-work “Ice Age.”
Not everyone’s happy
While the upgrade to ethereum 2.0 has a lot of backers, not everyone is happy about the change.
“There are some miners who are against it, but it’s in their financial interest to be against it,” said Beiko.
Once the protocol has fully migrated to a proof-of-stake model, there won’t be any revenue to be made from ethereum mining.
At that point, miners have a few options for what to do next.
There are a lot of other chains that support GPU-based mining, so miners could simply choose to start mining other cryptocurrencies.
They could also decide to just shut down mining operations entirely and sell their mining equipment. Beiko expects to see a lot of that.
“We’ve also seen many mining farms and mining pools on ethereum start to get into staking,” he said.
“We’ve seen mining pools use their profits to set up validators on ethereum. We’ve also seen them offer pooling services for their users who might not have 32 ether but still want to validate the network.” So even if you don’t have $90,000 parked in ether, you still might be able to keep some skin in the mining game.
Peter Thiel, co-founder of PayPal, Palantir Technologies, and Founders Fund, holds hundred dollar bills as he speaks during the Bitcoin 2022 Conference at Miami Beach Convention Center on April 7, 2022 in Miami, Florida.
Marco Bello | Getty Images
The Peter Thiel-backed cryptocurrency exchange Bullish filed for an IPO on Friday, the latest digital asset firm to head for the public market.
The company, led by CEO Tom Farley, a veteran of the finance industry and former president of the New York Stock Exchange, said it plans to trade on the NYSE under the ticker symbol “BLSH.”
A spinout of Block.one, Bullish started with an initial investment from backers including Thiel’s Founders Fund and Thiel Capital, along with Nomura, Mike Novogratz and others. Bullish acquired crypto news site CoinDesk in 2023.
“In the first quarter of 2025, Bullish exchange executed over $2.5 billion in average daily volume, ranking in the top five exchanges by spot volume for Bitcoin and Ether,” the company said on its website. The prospectus listed top competitors as Binance, Coinbase and Kraken.
The IPO filing says that as of March 31, the total trading volume since launch has exceeded $1.25 trillion.
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The filing is another significant step for the cryptocurrency industry, which has fought for years to convince institutions to embrace digital assets as legitimate investments.
It’s already been a big year on the market for crypto offerings, highlighted by stablecoin issuer Circle, which has jumped more than sevenfold since its IPO in June. Etoro, an online trading platform that includes services for crypto investors, debuted in May.
Novogratz‘s crypto firm Galaxy Digital started trading on the Nasdaq in May, moving its listing from the Toronto Stock Exchange. And in June, Gemini, the cryptocurrency exchange and custodian founded by Cameron and Tyler Winklevoss, confidentially filed for an IPO in the U.S.
Meanwhile, investors continue to flock to bitcoin. The digital currency is trading at over $117,000, up from about $94,000 at the start of the year.
President Donald Trump, on Friday, signed the GENIUS Act into law — a set of regulations that establish some initial consumer protections around stablecoins, which are tied to assets like the U.S. dollar with the intent of reducing price volatility associated with many cryptocurrencies.
In its filing with the SEC, Bullish says its mission is partly to “drive the adoption of stablecoins, digital assets, and blockchain technology.”
Crypto industry players, including Thiel, Elon Musk, and President Trump’s AI and Crypto czar David Sacks spent heavily to re-elect Trump and have pushed for legislation that legitimizes digital assets and exchanges.
Microsoft Chairman and Chief Executive Officer Satya Nadella (L) returns to the stage after a pre-recorded interview during the Microsoft Build conference opening keynote in Seattle, Washington on May 19, 2025.
Jason Redmond | AFP | Getty Images
Microsoft on Friday revised its practices to ensure that engineers in China no longer provide technical support to U.S. defense clients using the company’s cloud services.
The company implemented the changes in an effort to reduce national security and cybersecurity risks stemming from its cloud work with a major customer. The announcement came days after ProPublica published an extensive report describing the Defense Department’s dependence on Microsoft software engineers in China.
“In response to concerns raised earlier this week about US-supervised foreign engineers, Microsoft has made changes to our support for US Government customers to assure that no China-based engineering teams are providing technical assistance for DoD Government cloud and related services,” Frank Shaw, the Microsoft’s chief communications officer, wrote in a Friday X post.
The change impacts the work of Microsoft’s Azure cloud services division, which analysts estimate now generates more than 25% of the company’s revenue. That makes Azure bigger than Google Cloud but smaller than Amazon Web Services. Microsoft receives “substantial revenue from government contracts,” according to its most recent quarterly earnings statement, and more than half of the company’s $70 billion in first-quarter revenue came from customers based in the U.S.
In 2019, Microsoft won a $10 billion cloud-related defense contract, but the Pentagon wound up canceling it in 2021 after a legal battle. In 2022, the department gave cloud contracts worth up to $9 billion in total to Amazon, Google, Oracle and Microsoft.
ProPublica reported that the work of Microsoft’s Chinese Azure engineers is overseen by “digital escorts” in the U.S., who typically have less technical prowess than the employees they manage overseas. The report detailed how the “digital escort” arrangement might leave the U.S. vulnerable to a cyberattack from China.
“This is obviously unacceptable, especially in today’s digital threat environment,” Defense Secretary Pete Hegseth said in a video posted to X on Friday. He described the architecture as “a legacy system created over a decade ago, during the Obama administration.” The Defense Department will review its systems in search for similar activity, Hegseth said.
Microsoft originally told ProPublica that its employees and contractors were adhering to U.S. government rules.
“We remain committed to providing the most secure services possible to the US government, including working with our national security partners to evaluate and adjust our security protocols as needed,” Shaw wrote.
On June 6, online real estate service Opendoor was so desperate to get its beaten-down stock price back over $1 and stay listed on the Nasdaq that management proposed a reverse split, potentially lifting the price of each share by as much as 50 times.
The stock inched its way up over the next five weeks.
Then Eric Jackson started cheerleading.
Jackson, a hedge fund manager who was bullish on Opendoor years earlier when the company appeared to be thriving and was worth roughly $20 billion, wrote on X on Monday that his firm, EMJ Capital, was back in the stock.
“@EMJCapital has taken a position in $OPEN — and we believe it could be a 100-bagger over the next few years,” Jackson wrote. He added later in the thread that the stock could get to $82.
It’s a long, long way from that mark.
Opendoor shares soared 189% this week, by far their best weekly performance since the company’s public market debut in late 2020. The stock closed on Friday at $2.25. The stock’s highest-volume trading days on record were Wednesday, Thursday and Friday of this week.
Jackson said in an interview on Thursday that the bulk of his firm’s Opendoor purchases came when the stock was in the 70s and 80s, meaning cents, and he’s bought options as well for his portfolio.
Nothing has fundamentally improved for the company since Jackson’s purchases. Opendoor remains a cash-burning, low-margin business with meager near-term growth prospects.
What has changed dramatically is Jackson’s online influence and the size of his following. The more he posts, the higher the stock goes.
“There’s a real hunger for buying the next big thing,” Jackson told CNBC, adding that investors like to find the “downtrodden.”
It’s something Jackson’s firm, based in Toronto, has in common with Opendoor.
When Opendoor went public through a special purpose acquisition company in 2020, it was riding a SPAC wave and broader gains driven by low interest rates and Covid-era market euphoria. Investors pumped money into the riskiest assets, lifting money-losing tech upstarts to astronomical valuations.
Opendoor’s business involved using technology to buy and sell homes, pocketing the gains. Zillow tried and failed to compete.
Opendoor shares peaked at over $39 in Feb. 2021 for a market cap just above $22.5 billion. But by the end of that year, the shares were trading below $15, before collapsing 92% in 2022 to end the year at $1.16.
Rising interest rates hammered the whole tech sector, hitting Opendoor particularly hard as increased borrowing costs reduced demand for homes.
Jackson, similarly, had a miserable 2022, coinciding with the worst year for the Nasdaq since 2008. Jackson said his key client withdrew its money at the end of the year, and “I’ve been small ever since.”
‘Epic comeback’
While his assets under management remain minimal, Jackson’s reputation for getting in early to a rebound story was burnished by the performance of Carvana.
The automotive e-commerce platform lost 98% of its value in 2022 as investors weighed the likelihood of bankruptcy. In the middle of that year, with Carvana still far from bottoming out, Jackson expressed his bullishness. He told CNBC that April that he liked the stock, and then promoted its recovery on a podcast in June. He also said he liked Opendoor at the time.
Investors willing to stomach further losses in 2022 were rewarded with a 1,000% gain in 2023, and a lot more upside from there. The stock closed on Friday at $347.52, up from a low of $3.72 in Dec. 2022, and almost triple its price at the time of Jackson’s appearance on CNBC in April of that year.
After Carvana’s 2022 slide, “then obviously began an epic comeback,” Jackson said. Opendoor, meanwhile, “continued to roll down the mountain,” he said.
Jackson said that the fallout of 2022 led him to pursue a different method of stockpicking. He started hiring a small team of developers, which is now four people, to build out artificial intelligence models. The firm has experimented with several models —some have worked and some haven’t — but he said the focus now is using what he’s learned from Carvana to find “100x” opportunities.
In addition to Opendoor, Jackson has been promoting IREN, a provider of power for bitcoin mining and AI workloads, and Cipher Mining, which is in a similar space. He’s seen his following on Elon Musk‘s social media site X, which he said was stuck for years between 32,000 and 34,000, swell to almost 50,000. And after a lengthy lull, investors are reaching out to him to try and put money into his fund, he said.
Jackson has a lot riding on Opendoor, a company that saw revenue and number of homes sold slip in the first quarter from a year earlier, and racked up almost $370 million in losses over the past four quarters.
In early June, Opendoor announced plans for a reverse split — ranging from 1 for 10 to 1 for 50 — to “give us optionality in preserving our listing on Nasdaq.” With the stock now well over $1, such a move appears less necessary, as shareholders prepare to vote on the proposal on July 28.
“I think it’s a terrible idea,” said Jackson. “Those things usually further cement a company’s move into oblivion rather than hail some big revival.”
Opendoor didn’t respond to a request for comment.
Banking on growth
Analysts are projecting a more than 5% drop in revenue this year, followed by 20% growth in 2026 and 12% expansion in 2017, according to LSEG. Losses are expected to narrow over that stretch.
Jackson said his analysis factors in projections of $11.5 billion in revenue for 2029, which would be well over double the company’s expected sales for this year. He looked at the multiples of companies like Zillow and Carvana, which he said trade for 4 to 7 times forward revenue. Opendoor’s forward price-to-sales ratio is currently well below 1.
With Zillow and Redfin having exited the instant-buying home market, Opendoor faces little competition in allowing homeowners to sell their property online for cash, rather than going through an extended bidding, sales and closing process.
Jackson is banking on revenue growth and increased market share to lead to a profitable business that will push investors to value the company with a multiple somewhere between Zillow and Carvana. At $82, Opendoor would be worth about $60 billion, which is roughly 5 times projected 2029 revenue.
Jackson said his model assumes that “like Carvana, Opendoor can prove that it can permanently turn the tide and get to sustained profitability” so that the “market multiple would get reassessed.”
In the meantime, he’ll keep posting on X.
On Friday, Jackson wrote a thread consisting of 11 posts, recounting the challenge of having “99.5% of my AUM” disappear overnight after his primary investor pulled out in 2022.
“Translation: he fired me for losing him too much money,” Jackson wrote. He said he almost shut down the fund, and was even encouraged to do so by his wife and accountant.
Now, Jackson is using his recent momentum on social media to try and attract investor money, while still reminding prospects that he could lose it.
“All I have is my reputation,” he wrote, “and, unless I keep picking good stocks, it will be gone.”