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Proof of Stake (PoS) to reduce energy consumption in ETH mining

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  • Ethereum plans to shift to PoS at the earliest 
  • It will reduce energy consumption by at least 99.95%
  • A hybrid system of PoS and PoW might be in use in the future for better usability and profitability 

Once Proof of Stake (PoS) is implemented within the Ethereum network, it is poised to reduce energy consumption throughout the chain. The validators will require less energy to mine new digital currency and protect it from attackers. A belief says that consensus or Proof of Work (PoW) consumes a country’s worth of energy in stark contrast to PoS that requires only 2.62 MW. Times will change in innovation and research in the field and further reduce energy consumption. 

Proof of Stake (PoS) to bring a lot of change for the better. 

PoS does not require computational energy at the exponential level to create blocks. Also, normal desktops and laptops will be enough to act as validators. A lot of new miners will be able to run on the network as efficient nodes. It will lead to an even more decentralized network of blockchain. Once a validator approves a legitimate transaction, he/she will be rewarded with transaction fees. However, on the other hand, a fraudulent activity approval will lead to the validator being reprimanded until further notice. 

PoS uses randomized block selection and/or coin age selection metrics for a validator to win the right to forge the next block. Here, a validator places a certain amount of crypto as collateral and assigns a block builder to forge the next block in line. In return, the validator is compensated with a reward. 

The energy numbers speak volumes. 

Currently, miners consume 5.13 gigawatt on a continuing basis that amounts to 44.49 TWh per year. Comparisons have been drawn and the results are astonishing as 2000x times energy is saved under PoS. Under this system, 2.62 MW of energy is consumed per set up. The survey is from a small town in America where homes of inhabitants are not more than 2100.  

The numbers definitely speak volumes as mining cost will be reduced significantly. PoS was first used in a digital coin named Peercoin in 2012. A random validator was chosen to do the task instead of millions doing it simultaneously. Fresh ether will be issued at a faster rate soon that will help validators with reduction in time and energy. 

A hybrid consensus is in the offing.

Experts believe that a hybrid consensus may be followed where every 1 out of 10 validator is assigned a PoW task while the others may work according to PoS. Combined benefits of a secure network from PoW and less energy consumption from PoS will be received. A miner and a staker will work to defend attackers.

At times, miners need to have consensus before switching to PoS as it undermines their profitability. Otherwise, the change won’t go through or a hard fork would be required for the shift to take place. A lot of investment of miners will be at stake with the introduction of PoS. However, digital currencies look to reduce cost and save energy multifold.  

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