![]() The merge is only the latest Ethereum blockchain upgrade aimed at creating a reliable decentralized ecosystem for the future of finance. How will that shift affect Bitcoin, which still stands alone atop the crypto market and still uses proof of work? Shifting sands That's when the world’s second largest cryptocurrency will jettison its energy-intensive proof-of-work consensus mechanism. With block rewards decreasing from 5 ETH to 3 ETH and every 100th block soon being validated by PoS, you should check out mining other coins like Monero or even Ethereum Classic.Ethereum founder Vitalik Buterin said on Tuesday that the Ethereum merge is on target to happen "around" September 13 to September 15. Even though a complete shift to a PoS algorithm is still a year or two away, it’s clear that the Ethereum community is almost unanimous in this decision. If you’re a miner, you may want to start looking for more profitable coins to mine. Right now, there’s not an exact estimate of when it’ll be released. The time bomb was originally planned to go off at the end of 2017 but has been pushed back by a year and a half. Implementation of this strategy should prevent the creation of a third fork as support for the original PoW fork will just shift to the new PoS fork. To put it simply, the difficulty time bomb increases the mining difficulty exponentially until the chain becomes impossible to mine – an event called the “Ethereum Ice Age”. The Ethereum developers have stated that they’ll be releasing what they call the “ difficulty time bomb” on the PoW chain shortly after Casper is implemented. With the upcoming hard fork, there could potentially be three forks of Ethereum:Īnd, if you’re a miner, you may be thinking, “No big deal, I’ll just continue to mine and give support to the Ethereum PoW fork.” Sharding is a horizontal partitioning of a large database into smaller and more easily managed parts.īeyond that, PoS algorithms also use less energy to run the network, reduce centralization, and make 51% attacks more difficult. The algorithm should enable new blocks to be created more quickly while allowing the network to scale more efficiently through sharding. The Ethereum community hypothesizes that the switch to PoS will help with the scaling issues that the network is currently facing. This removes a lot of the power that miners currently have. Even if 99% of miners support a chain that doesn’t include a checkpoint block, all clients in the network will still continue to use the one with the checkpoints. Once a checkpoint is validated, there’s no way to go back and use a chain without it. ![]() ![]() Beginning as a hybrid with the current PoW algorithm, the first version of Casper will only use a PoS consensus to validate every 100th block, called “checkpoints”. The release date is estimated to be sometime in 2018 as part of the Constantinople hard fork and there’s a lot to learn before this happens:Ĭasper is a PoS algorithm that’s projected to be released on the Ethereum network sometime in 2018. ![]() In August of this year (2017), Vitalik Buterin, creator of Ethereum, released the implementation guide for the first version of Casper.Īs a hybrid proof-of-stake (PoS)/proof-of-work (PoW) algorithm, Casper v1 is going to decrease (and eventually end) the profitability for Ethereum miners.
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