Wait! What Just Happened with Ethereum?
Yea, you heard it right. Ethereum’s shift towards a far more convenient and consensus mechanism PoS (Proof-of-Stake) from PoW (Proof-of-Work) ushers in a lot of new opportunities in the digital currency ecosystem. It comes as one of the inevitable upgrades with regards to the community strategy that Ethereum was entitled to. However, with new adoption comes a bunch of new technical challenges to successfully attain consensus in the network. With a sole motive to reach distributed consensus, blockchain uses a consensus mechanism and PoS is one such mechanism recently adopted by Ethereum.
In order to be called a validator in an active network, staking ETH can be an option for the users. As far as Ethereum is concerned, staking 32 ETH will help the users to be recognized as validators. The key role of such validators is to check and confirm blocks that are not created by them.
Switching to PoS will have a bunch of benefits for Ethereum?
Proof-of-Stake provides an additional energy efficiency which is highly convenient for the miners as they don’t have to exert a lot of energy while mining blocks. Furthermore, miners leverage the benefit of lower entry barriers, and the requirement for hardware also reduces significantly. It implies that you are no longer supposed to have elite hardware to create new blocks successfully. PoS also provides improved immunity to the overall centralization as it will pave the way for more nodes in an established network.
Stakes and Validators
Validators can leverage unprecedented benefits of Proof-of-Stake as it doesn’t require computational power anymore because they are not competing here and are picked randomly. In simple terms, they don’t have to engage in mining blocks and a process called “Attesting” is done here.
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Attesting is basically a validation that can be viewed by the validators that might say “I think this block looks pretty good”. This is how validators are rewarded just by attesting to the blocks that they see and also by proposing newer blocks. However, things go downhill in real-time if validators end up attesting to malicious blocks and the stakes are also lost in that case.
Ethereum looks in good shape with PoS
Secure sharding is possible with staking and multiple blocks can be created simultaneously as shard chains pave the way for Ethereum to do so which leads to an increase in transactions. The overall integrity of Ethereum is highly ensured through the Proof-of-Stake mechanism as validators perform their task of maintaining the cryptocurrency pretty wisely. PoS outweighs PoW on many fronts as it allows almost any user with a token to become a validator who can easily enter into the DeFi (Decentralized Finance) ecosystem. Moreover, PoS substantially helps in cutting the environmental cost by eliminating the use of intricate cryptographic puzzles. This is yet another benefit that Ethereum can avail which Bitcoin has not been able to capitalize on yet due to heavy usage of PoW protocols.
The ongoing battle between PoW and PoS continues as the proponents of both the mechanisms favor their respective choices. Cardano is a notable leader in Proof-of-Stake, however, when it comes to the biggest projects, Proof-of-Work wins that aspect effortlessly. This subject spread like a wildfire ever since Ethereum switched from PoW to PoS and continues to draw massive debate from the participants, investors, and traders. In a bid to maintain seamless network stability, it was inevitable for Ethereum to switch to efficient means which led to its wider adoption of a decentralized financial system.
Participation in a more decentralized and broader ecosystem will benefit the consumers.
As far as the market of graphic cards is concerned, the transition of Ethereum will certainly have a considerable impact on this market as well. The overall graphic cards demand for cryptographic mining will eventually plummet as the wider adoption of the Proof-of-Stake mechanism has been witnessed in Ethereum and other prominent digital currencies. It will curb the prevalent shortage which turns out to be a piece of favourable news for all the gamers.
Now, consumers can prepare themselves to easily participate in the PoS consensus mechanism as it is highly scalable and the overall staking rewards participation will also increase. Hence, participation in a more decentralized and broader ecosystem will inevitably benefit the consumers. If you want to invest some of your money in Ethereum, bitiq is the best platform to trade almost all cryptocurrencies.
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