Ethereum Has Completed its Transition to the POS Mechanism
After years of talk and promise, Ethereum has finally completed its transition from the proof-of-work to the proof-of-stake mechanism.
As a result of the Merge, the name used for this grand transition, Ethereum attained three goals.
First, it ditched the proof-of-work system, on which the mother-of-all-crypto Bitcoin is built, and which is also extremely energy consuming.
Second, it significantly reduced the environmental cost of enabling the circulation of cryptocurrency. Some estimates suggest that it could go down by as much as 99.9%.
Third, it is now becoming more secure and scalable.
To complete the transition, miners will be replaced with the so-called validators who need to stake at least 32 ETH by sending them to an address on the Ethereum network. Once they have done so, the funds sent will be effectively locked. In other words, you will not be able to buy or sell them.
As per the new system, the more tokens a person stakes, the likelier he or she is to receive the ability to write a “block” of transactions to Ethereum's digital ledger.
Ethereum first introduced its PoS system, dubbed Beacon chain, in 2020. Until the Merge, it served as a staging area for validators to get set up for the switch. Later, Beacon Chain was used for the integration with Ethereum’s main network.
Complex from a technological perspective, the latest update also required coordination across dozens of teams and scores of individual researchers, developers, and volunteers. However, it is expected to pay off as the network is home to an ecosystem of cryptocurrency exchanges, lending companies, non-fungible token (NFT) marketplaces, and other apps worth $60 billion.
"This is the first step in Ethereum's big journey towards being a very mature system, but there are still steps left to go,"said Vitalik Buterin, Ethereum's co-creator, following the Merge’s completion.
Ethereum is trading at $1,440 press-time.
Previously, GNCrypto published an article about Ethereum’s POS transition pros and cons.
