One of the most famous networks in the world of cryptocurrencies, Ethereum, has decided to turn the way the cryptocurrency is used. consensus algorithm in order to mine your Ether cryptocurrency.
It is scheduled for June 2022 that Ether miners will stop doing it through their graphics processing units (GPU) to switch to another way of mining, and this involves selling the equipment or moving on to mining other cryptocurrencies.
Change of consensus algorithm: from PoW to PoS
Surely you have heard how cryptocurrencies work and how they work. decentralized blocks of the blockchain called blockchainand to all this is added that there is no central authority that supervises the entire process, if not, on the contrary, all users do it at the same time.
To ensure that all transactions are carried out correctly and that there are no processing problems, fraud, or people making the same transaction twice with the same cryptocurrencies, all nodes (computers) that are part of the network have to agree on the validity of the transaction.
The transaction verification method is performed through a consensus algorithm and is protected through a cryptographic process. In the specific case of Ethereum, since the project began in 2015, the consensus algorithm has been used ‘Work test’ (PoW).
The proof of work needs all the nodes of the blockchain network to be able to execute the different mathematical calculations to be able to decrypt the transaction that is encrypted. The first one who cracks the math problem is rewarded and verifies whether the transaction is correct or not, and then a new block is added to the corresponding chain.
In order to solve mathematical problems faster and earn more rewards, miners invest in better technology, the more powerful the computers, the more possibilities there are to solve more math problems Y get more rewards. But there is a limit of transactions that can be verified.
When a network detects that computers are cracking proofs too quickly, this network increases the difficulty of math problems as a defense mechanism. This causes higher energy consumption and is one of the problems that cryptocurrencies are always criticized for.
During the past year, the developers of the red Ethereum they decided to reduce this environmental bill with excessive energy expenses, since they considered it to be unsustainable and the solution they have come up with is to change the consensus algorithm from ‘Proof of Work’ to ‘Proof of Stake’ (PoS), and it will make a decrease feasible energy of more than 99 percent.
How Proof of Stake (PoS) Works
The ‘proof of stake‘ is a consensus algorithm in which the miners are replaced by another figure named validators that perform the same functions as miners, except that they do not have to solve mathematical problems, but rather validate according to the number of cryptoactives as a guarantee that there are no incorrect behaviors.
The transaction validators choose through a lottery, that is, an algorithm based on the quantity and time of the crypto assets that it places in the collateral network. If there is any type of fraudulent act, the validator loses the cryptocurrencies that he has put in guarantee, this is called ‘Staking’.
When is it going to happen?merge’?
The transition to ‘Proof of Stake’ on the Ethereum network will take place in the month of June 2022that is, there are less than 3 months to go before the consensus algorithm change is made.
This topic was nothing new, the change had even been considered for a long time, since it was wanted to have been implemented during the year 2019, but each year the topic was delayed.
The change that is going to take place will reduce the great energy consumption that currently produces the second largest cryptocurrency trading network worldwide, and will be a determining factor for consumers to look at cryptocurrencies from another side.
Image | Ivan Radic
Source: El Blog Salmón by www.elblogsalmon.com.
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