Ethereum and bitcoin are two of the top cryptocurrencies in the world. Both of them are in the news as the bitcoin market crash has affected other cryptocurrencies too, and Ethereum is one of them. If you want to learn about the latest updates in the crypto world, you must visit the cryptocurrencies websites. Moreover, Ethereum is planning to shift from the Proof-of-work system to the Proof-of-Stake model. It is considered an excellent chance to give Ethereum some advantage over its top competitor; bitcoin.
Ethereum switching to PoS from PoW
Cryptocurrencies have been criticized from time to time for their massive energy consumption. So, to solve this issue, the biggest competitor of bitcoin, Ethereum, is planning to shift from a Proof-of-Work system to a Proof-of-Stake system. It is believed that after this significant change, the energy consumption of Ethereum will be reduced by 99.5%, which is a massive amount of energy. Although, the amount of energy consumed by Ethereum is way less than other major cryptocurrencies in the market. But the experts and researchers are still trying to find ways in which they can minimize energy consumption and lower the damage caused to the environment. The shift from PoW to PoS will help in it to a great extent.
The researchers said that their teams are working continuously to make this transition smooth and easy. They also claimed that the shift would be completed soon, and the Ethereum users don’t need to worry as, despite the shift, the safety of their data will not be compromised at any cost. Over 44.49 TWh of energy is consumed by Ethereum mining in a year. It will be cut down to 5.13 gigawatt after the shift, which means over 99.955 of energy will be saved.
Some small cryptos already using PoS
Ethereum is planning to shift to the PoS, but there are several small cryptocurrencies that are already using the PoS method. The new system states that a miner can only access that number of new coins, which is owned by him. For instance, a miner owns 2% of all the coins, so he will be able to access only 2% of the new coins. It will minimize energy consumption and will make mining more energy and environment friendly. With the proof-of-stake, the mining can be done on one simple computer, which will remove the need to having a massive warehouse of servers with a vast network of computers. So, it is evident that when a vast network of computers is replaced by one computer, energy consumption will decline drastically.
What’s the difference between PoS and PoW systems?
Now, when the shift planned by Ethereum is all over in the news, most users are confused about how the transmission from the PoW model to the PoS model will increase the efficiency of these cryptocurrencies. With the traditional Proof-of-Work model, there is a massive risk that the mining pool may gain control over the crypto world in the future. So, to avoid all the security risks and ensure that the centralization of crypto mining doesn’t happen, it is important to shift to the Proof-of-Stake system.
With the PoS system, high computational power will no longer be needed, which will remove the role of mining pools. Validators will be used to confirm the transaction and create blocks. There will be no competitions among the validators as they will be chosen randomly through an algorithm. If more than half of the validators will agree on the state of the block, it will be approved, but for that, they will have to put their while stake of coin online. If something goes wrong, they will lose the stake. Along with it, there are some scaling solutions too, which will assist in reducing energy consumption, which will surely help Ethereum grow at a rapid pace.
What’s the right thing to do after the market crash?
The bitcoin market has suffered a massive crash, and most of the investors have already withdrawn their money, and the rest are confused about what should they do? According to the experts, if you are investing in crypto, you must invest only that much amount which you can afford to lose. Cryptocurrency is highly volatile, so it is necessary to be careful. Moreover, if you want to hold and make profits over the long term, you must gain proper knowledge and learn about the crypto market.