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Ethereum migration to PoS (proof of stake) is being speeded up – is this a big buy signal or will the developer fail to deliver o n this complex task?
Ethereum has posted remarkable price action relative to Bitcoin in the past few months. But the growth of sub-sectors like Decentralized Finance (DeFi) and non-fungible tokens (NFTs) have exposed its flaws. Gas fees have shot up, and Ethereum has been slow in validating transactions.
Like bitcoin, Ethereum uses a the proof-of-work (PoW) consensus algorithm that consumes large amounts of energy in validating transactions. The ‘mining’ process also takes time to complete, causing congestion and preventing PoW-based blockchains from scaling up transaction throughput.
The protocol, which stands accused of being a contributor to environmental pollution, continues to draw mounting criticism from environmentalists. This begs the question of when Ethereum’s migration to PoS or Proof-of-Stake will be completed.
Ethereum’s Migration to PoS Coming 2021 Ending
Ethereum founder Vitalik Buterin says the carbon footprint concerns may be coming to an end soon. Speaking to Bloomberg Green, Buterin noted that the migration to PoS protocol has become necessary given the rapid growth of crypto and Ethereum’s use case in the past year. According to the Russian-Canadian developer, he hopes the migration will be made by the year’s end.
The Ethereum blockchain has been under fire far less than its older cousin Bitcoin regarding the network’s rising energy demands.
Furthermore, its continued dependence on the PoW protocol has seen its transaction fees skyrocket, and the growing customer base has seen many retail users having to spend lengthy periods before validating their transactions. Ethereum transaction speed currently takes 15 seconds which is poor for a major crypto hub.
The migration to PoS is seen as a win for the crypto industry and Ethereum itself. The first beneficiary being its utility token Ether, which many feel will rise given its myriad use cases in the DeFi world.
Another plus would see the Ethereum network become environmentally friendly as miners will no longer have to compete to solve complex mathematical puzzles. Instead, they will validate transactions based on the amount of Ether they have.
Even though the Ethereum network has been planning to migrate to a less energy-intensive protocol for years, it has been slow going. However, Vitalik’s comments on the network’s migration to PoS should be encouraging for the community.
New Wave of ‘Green Coins’ Pushing Ethereum’s Migration to PoS Closer?
Recent comments on crypto energy use, especially Bitcoin’s, by Tesla boss Elon Musk, has seen the crypto market cap shrink in recent weeks as investors have grown more concerned.
Musk, who has been a crypto supporter for a while, although has attracted strong criticism for his tweets contributing to crashing the market of late, also revealed that Tesla pulled Bitcoin as a form of payment it would accept. He also told his supporters he was interested in a crypto protocol that consumes less than 1% of Bitcoin’s energy demands.
These comments led to blockchain network Cardano’s price shooting, up given the minimal energy it uses in verifying transactions.
Cardano’s CEO Charles Hoskinson has also spent some time touting the network, claiming it is 1.6 million times more energy-efficient than PoW used by Bitcoin and Ethereum.
Cardano is gradually building its use case with the recent Mary upgrade, which transformed the network from a single asset blockchain (ADA) to a multi-asset blockchain. This effectively means Cardano users can now issue custom tokens, comparable with the Ethereum network.
Another “green coin”, as low-energy protocols are called, is the newly launched Chia protocol.
Chia uses a proof of space and time protocol to “farm” rather than “mine”new digital tokens, thereby cutting down on its energy use. The project has received positive feedback as its price surged over $1,600 before the recent market correction as more investors seek out eco-friendly crypto protocols.
A fast-track of its ETH 2.0 migration could help Ethereum retain its position as the home of the evolving DeFi space.
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