What is The Future Fate of Ethereum?
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What is The Future Fate of Ethereum Article
Proof of stake: This protocol will make the entire mining process virtual. In this system we have validators instead of miners. The way it works is that as a validator, you will firstly have to lock up some of your ether as stake. After doing that you will then start validating blocks which basically means that if you see any blocks that you think can be appended to the blockchain, you can validate it by placing a bet on it. When and if, the block gets appended, you will get a reward proportional to the stake you have invested. If, however, you bet on the wrong or the malicious block, the stake that you have invested will be taken away from you.
To implement “proof of stake” Ethereum is going to use the Casper consensus algorithm. In the beginning it is going to be a hybrid style system where majority of the transactions will still be done proof of work style while every 100th transaction is going to be proof of stake. What this will do is that it will provide a real world test for proof of stake on Ethereum’s platform. But what does that mean for Ethereum and what are the advantages of this protocol? Let’s take a look.
Advantages of proof of stake
Lowers the overall energy and monetary cost: The world’s bitcoin miners spend around $50,000 per hour on electricity. That’s $1.2 million per day, $36 million per month and ~$450 million per year! Just put your head around those numbers and the amount of power being wasted. By using “Proof-of-stake” you are the making the whole process completely virtual and cutting off all these costs.
No ASIC advantage: Since the whole process will be virtual, it wouldn’t depend on who has the better equipment or ASICs (application-specific integrated circuit).
Makes 51% attack harder: 51% attack happens when a group of miners gain more than 50% of the world’s hashing power. Using proof of stake negates this attack.
Malicious-free validators: Any validator who has their funds locked up in the blockchain would make sure that they are not adding any wrong or malicious blocks to the chain, because that would mean their entire stake invested would be taken away from them.
Block creation: Makes the creation of newer blocks and the entire process faster. (More on this in the next section).
Scalability: Makes the blockchain scalable by introducing the concept of “sharding” (More on this later.)
My name is Ameer Rosic, and I’m a serial entrepreneur, investor, Marketing Strategist and Blockchain Evangelist
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