Transition to Ethereum 2.0 standards notwithstanding miners’ protests

Ethereum network soon to transform from Proof-of-Work to Proof-of-Stake methods
  • The newer version of the Ethereum blockchain is termed as Ethereum 2.0 or Eth2
  • It will rely on the Proof-of-Stake (POS) mechanism to validate newer transactions
  • Migrating away from Proof-of-Work (POW) would lead to significant energy savings and reduced chain congestion
  • However, miners involved in minting Ether warn of a catastrophic rebellion if the chain migrates

It is a familiar fact that minting Bitcoin is a voracious task in terms of computational cost and energy consumption.BTC requires the same energy as 1.57 times an American household would consume in a day. The total energy cost is also speculated to be on par with the consumption of power by Denmark’s entire country.

The reason underlying such dramatic power utilization is because all transactions on the Bitcoin and Ethereum blockchain is verified by solving a cryptographic puzzle involving brute force mechanism, commonly known as the Proof-of-Work Scheme (POW), by a group of miners who receive BTC as their reward. However, Ethereum plans to migrate to a cleaner and greener alternative, the Proof-of-Stake (POS) algorithm.

Tensions run high among miners and developers.

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While publishing documentation detailing Eth2’s core infrastructure, developer Mikhail Kalinin proposed a future blockchain merger with the existing network. This contradicts the hard-fork theory previously advocated by creator Vitalik Buterin. Yet, migration or merging would significantly enhance developers as per the Ethereum Improvement Proposal 1559. It would reduce congestion on the main chain and substitute the current fee market with a new flat price and burn mechanism. This would significantly lower the earnings of miners currently mining Ether by as much as about 50%.

Developers ostensibly prepared for miner attacks.

A group of miners have called upon their colleagues to redirect their hash power to mine a 1559-opposing Ethermine pool for a period of 51 hours on April 1. However, Vitalikand other developers seem prepared for this causality. To minimize the effects of a miner attack or rebellion, many Redditors and developers have been advocating the merge instead of a hard-fork so that miners won’t be able to counteract the positives of EIP 1559 resolution.

Anticipating that the network traffic would continue to increase in the coming months, Vitalik also announced that two-layer scaling solutions would be rolled out in the near future. It will scale the Ethereum chain sufficiently until a sharding protocol is implemented.

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Steve Anderrsonhttp://www.thecoinrepublic.com
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.

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