Ethereum Is Ditching Proof-Of-Work Verification For A Less Energy Intensive Process
The blockchain will switch to proof-of-stake on September 12.
Ethereum plans to switch from a proof-of-work verification model to a proof-of-stake one on September 14, 2022. In short, this means a much lower energy cost for the open source blockchain.
According to a report from Wired, Ethereum is confident that the switch, called the Merge, will increase the value of ether--the cryptocurrency that uses Ethereum as a base. Otherwise, the Merge matters because proof-of-work is notoriously energy-intensive. The process requires specialized computers to verify transactions. Thousands of computers all around the world churn out complex math problems, appending the solution to a chain of interactions. If someone wanted to recreate the blockchain process, to steal cryptocurrency or make it seem as though a transaction never happened, they would have to re-mine the whole chain. That requires a massive amount of hardware. Basically, proof-of-work makes the process secure, but also causes the massive energy costs and all the environmental devastation that comes with that cost.
Proof-of-stake, on the other hand, relies on incentives rather than high power calculations. Most computers can lay down a stake, and then are randomly selected to validate a transaction. If someone with a stake tries some funny business, they can be fined or their stake can be completely removed. In order to attack the chain, hackers would need to amass an absurd amount of wealth to duplicate the stakes used to validate transaction. However, for all this to work, ether would have to remain high value.
While this move will decrease ether's environmental impact, Bitcoin is unlikely to follow suit, at least according to Wired's analysis. Cryptocurrency miners are also looking for ways to continue to mine ether, via a process called forking. Previous forks for Ethereum, however, have been the victims of several successful attacks.
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