Ethereum, the world’s second-largest cryptocurrency by market cap, is about to undergo its most significant update since its creation in 2015. The transition from Proof of Work to Proof of Stake is a pivotal moment in crypto history as Ethereum strives to achieve its goals of mass adoption. Proof of Work requires computers to solve cryptographic puzzles, “working” to be rewarded with the ability to verify, or, validate transactions on the blockchain. It’s called cryptocurrency mining, and it’s similar to the competition. Proof of Stake requires multiple validators to agree that a transaction is accurate, and once enough nodes verify the transaction, it goes through.
The merger from Proof of Work to Proof of Stake aims to settle the uncertainty around Ethereum’s security, scalability, and sustainability. These upgrades will allow for a diverse and open-source network available to everyone with seamless transactions and more energy-efficient, sound, secure money. The transition to Proof of Stake makes improvements that help to tackle the hesitancies surrounding the Ethereum ecosystem.
Although the Proof of Stake model offers faster network speeds, consumes less energy, and offers greater financial opportunities for Ethereum users, it does come with a few flaws. Mining cryptocurrencies helps to secure the network through Proof of Work. Without mining, the network may be more susceptible to attacks. Proof of Stake also makes it harder to be a truly decentralized network, allowing whales to reap a greater profit from holding large quantities of Ethereum. All in all, the advancements to the network will help to bring Ethereum, and crypto as a whole, one step closer to mass adoption; one upgrade at a time!