Switching from proof of work to proof of stake would mean reducing carbon footprint, among other things.
Currently, the Ethereum network and other Blockchains, such as the Bitcoin network itself, operate using the proof of work (PoW) consensus that demands computing power to solve the new blocks that are added to the chain. When Bitcoin began to operate on its own network, the decision seemed logical, since it was possible to mine blocks with a laptop without difficulty, but eventually, the power needed to solve the blocks rose so much that it has been a long time since it has only been possible to mine those blocks with specialized devices such as ASICs. Today, the need to change the consensus mechanism is more pressing due to several factors, such as the carbon footprint.
About Ethereum
Ethereum is the second most used network in the Blockchain sector and its innovation was the introduction of smart contracts. This network also operates in PoW but the arrival of version 2.0 of the network has long been expected to replace this consensus mechanism with proof of stake (PoS), in which it is possible to validate the blocks based on the coins that are staked. In this format, it is not necessary for so much computing power to validate the blocks.
However, due to the revaluation of ether in recent years, the cost of transactions has risen greatly and it is common to have to pay tens of dollars to send an NFT to another wallet or to validate any DeFi transaction, as it can be a swap between tokens or a deposit. This undoubtedly has reduced the benefits of operations, and has motivated many users to try other Blockchains with lower gas costs, such as BNB Chain, Polygon, Avalanche, etc.
About Environmental Implications
In relation to the environment, the reduced use of IT equipment to validating blocks with the PoS consensus provides a more responsible way of using the energy resources destined for mining with a much smaller carbon footprint. We cannot reduce energy consumption to zero, but it is possible to greatly optimize the energy consumption of the equipment. Ultimately, the security of the network will increase by the change of consensus, as validators who do not do a good job will lose coins in the form of penalties.
In other words, Ethereum 2.0 would move to the consensus mechanism called proof of stake, or PoS, in which the miner has more influence not because of his computing capacity but because of his possession (or hold) of network coins, in this case, Ether. This change will be a setback for current miners, but they will be able – in principle – to adapt easily since those who have been in the sector for years must have held a certain amount of ETH in order to anticipate the transition.
In addition, with the coming of the Metaverse, many users are eagerly awaiting version 2.0 of Ethereum to take advantage of the updated network. Although there is still no confirmed date for its publication, it will not take too long and the community will benefit from the new features of this Blockchain.
By Audy Castaneda
