What will happen when Ethereum (ETH) switches from PoS to PoW?

Ethereum (ETH) is on the verge of experiencing its biggest revolution since its inception in 2015. For the time being, it, like Bitcoin (BTC), relies on a mechanism known as Proof of Work (PoW) to validate its blocks. However, this system is about to alter, resulting in a complete transformation of the blockchain's operating mechanism.

PoW is an energy-hungry system.

People that mine ETH use powerful computers to solve a puzzle with PoW. The winner will have the opportunity to validate the next block and win a significant prize. As a result, whomever has the most powerful computer will have an advantage. As a result, the PoW becomes an energy-hungry system that may cause environmental issues. However, in recent years, the issue of energy has been at the forefront of many organizations' concerns.

During the last two years, there have been conversations within the Ethereum community about changing the consensus method from PoW to Proof of Stake (PoS). This model has already been adopted by a number of new blockchains, including Cardano, Solana, and Avalanche, and has shown to be a huge success.

The advantage of PoS is that it does not necessitate the use of energy-hungry tools. Parties interested in validating the blocks can block a particular number of pieces in an intelligent contract. The implementation of Proof-of-Stake in Ethereum officially began in December 2020. The next and, without a doubt, most critical step is called "fusion."

The benefits that Ethereum will get as a result of the transition

According to Mark Cuban, there are two key aspects that make PoS extremely advantageous. On the one hand, the network Ethereum's environmental effect will be dramatically reduced. Because powerful hardware is no longer required, Ethereum's carbon empreinte will become almost neutral. As a result, the environmental argument against NFT, ETH, and Web 3 will no longer be relevant. As a result, institutions will have a much easier time adopting this technology.

On the other hand, following the merger, the issuance of the cryptocurrency ether (ETH) will drop by almost 90%. It's a significant historical shift for ETH. A 90 percent drop in issuances is the same as a three-fold drop in Bitcoin. With the introduction of the EIP-1559 in the middle of last year, ETH is able to burn a large portion of the gas fees that users pay to use the network. « When you combine it with a 90% reduction in ETH emission, you have a deflationary actif », the milliardaire explained.

Finally, the switch from PoW to PoS will result in significant network changes and will solve some of the blockchain's most serious issues. The world's largest decentralized and anti-censorship computer will now be environmentally friendly, and its native cryptocurrency will be deflationary. Despite the fact that the deadline is getting closer, the fusion does not appear to have been evaluated yet.

When the Ethereum network switches to the PoS system, significant changes will occur, allowing Ethereum's environmental footprint to be reduced. Cryptomonnaie users have been waiting for this moment for a long time.

Source : ZyCrypto