Ethereum : World’s Second Most Valuable Cryptocurrency
Ethereum, the world’s second most valuable cryptocurrency, has completed a significant software overhaul which promises to ramp up security of the cryptocurrency while claiming to cut down on its carbon footprint, nearly entirely.
- The revamp, known as ‘The Merge,’ will cast aside the need for crypto miners and gigantic mining farms, who had previously driven the blockchain under a mechanism called ‘proof-of-work’ (PoW).
- Instead, it has now shifted to a ‘proof-of-stake’ (PoS) mechanism that assigns ‘validators’ randomly to approve transactions and earn a small reward.
- The move to PoS will reduce ethereum’s energy consumption by nearly 99.95 per cent.
- Ethereum is still a decentralised platform, but under the new concept, it would not need miners and mining farms to authenticate transactions anymore.
- Instead, a validator will be randomly assigned using an algorithm from a pool of people who ‘stake’ their coins, which essentially means pledging at least 32 Ethereum tokens on the network.
- This would entirely eliminate the need for miners on the Ethereum network.