Crypto Mufasa
Advertise
  • Crypto News
    • General News
    • Bitcoin News
    • Altcoin News
    • Ethereum News
  • NFT NEWS
  • Beginner Guides
  • Price Predictions
  • Crypto Prices
No Result
View All Result
  • Login
  • Register
  • Crypto News
    • General News
    • Bitcoin News
    • Altcoin News
    • Ethereum News
  • NFT NEWS
  • Beginner Guides
  • Price Predictions
  • Crypto Prices
No Result
View All Result
Crypto Mufasa
No Result
View All Result

Home » How Ethereum Transition To PoS Would Be Different From PoW?

How Ethereum Transition To PoS Would Be Different From PoW?

Hania by Hania
September 14, 2022
in Beginner Guides, Ethereum News, General News
Reading Time: 5 mins read
A A
0
Ethereum (ETH) Soars To An Eight-Month High Ahead Of Shapella Upgrade
Share on FacebookShare on Twitter
ADVERTISEMENT

Table Of Content:

Toggle
    • What is Likely To Happen During The Merge?
    • What Would Happen To The ETH Miners After Its Merge
    • What is Ethereum Proof-of-Work (PoW)?
    • What Are The Problems That Arose From ETH PoW Fork?
    • Can You Gain Profit From ETH PoW?
  • Conclusion

The long-awaited Ethereum merge is approaching and recent developments on a potential fork of the ETH PoW chain have emerged.

Are you curious about this Merge?

This system has various features that might change your perception of Ethereum trading. For that, you need to understand these consensus mechanisms.

The consensus system PoW and PoS ensure the verification and regulation of the transaction process are to be added to the new block of blockchain ledger without any central authority.

You May AlsoLike

Polymarket Bets

March 2025 Polymarket Bets Boom for Bitcoin, XRP, ETH, AI, and DOGE – The Future of Cryptocurrency Trading!

March 1, 2025
Ethereum’s Pectra Upgrade

3 Essential Insights from Recent Developer Call on Ethereum’s Pectra Upgrade

March 1, 2025

Proof of Stake is a type that is used by blockchain networks for achieving distributed consensus. It needs traders to stake their ETH to become a validator. On the contrary, Proof of work is a type of consensus in which one proves to others (or verifies) that an amount of a typical computational effort has been expended.

How Ethereum Transition To PoS Would Be Different From PoW?

Bitcoin works on a Proof of work consensus algorithm. Contrarily, Ethereum uses a Proof-of-Stake consensus mechanism.

However, there are many emerging speculations around Ethereum’s transition to Proof of Stake and the future of the PoW chain. For understanding, let’s see how this transition is taking place.

Also Read: IT’S TIME FOR THE MERGE: ETHEREUM COMPLETES ITS LAST SHADOW FORK BEFORE TRANSITION

i fork ethereum once,i will fork it again! https://t.co/3DdlZ3zMz9

— ChandlerGuo (@ChandlerGuo) July 27, 2022

What is Likely To Happen During The Merge?

  • Merge will result in the transition of Ethereum from Proof-of-work to Proof of StakeStake. It is likely to happen on Sept 15.
  • The existing PoW merges with the Beacon Chain, PoS, into the new Ethereum Blockchain (PoS).
  • Staked ETH will only become withdrawable within 6-12 months after the Merge.
  • It will not increase throughput or decrease gas fees.
  • Ethereum’s issuance rate will decrease by 90%
  • ETH will become “more environmentally friendly” by switching from PoW, which consumes a lot of energy.

The transition has more intricacies, but the points mentioned above are the crux of what would happen. You can find more information by searching about Ethereum 2.0, although we must point out that the terminology “Ethereum 2.0” has since been dropped by the ETH foundation.

Also Read: AIMING TO LAUNCH THE NETWORK JUST 24 HOURS AFTER THE MERGE, THE TEAM BEHIND ETHEREUM’S POW FORK

What Would Happen To The ETH Miners After Its Merge:

It’s not like Miners’ work would be over, and they won’t be able to continue in this market!

Miners would have few options on the table, like shifting to other GPU-mined proof-of-work coins such as Ethereum Classic. Vitalik Buterin suggested that miners continued with Ethereum classic and called it “totally a fine chain.”

Also, they can go for Ravencoin. Miners could also use their hardware for other GPU-intensive activities, like machine learning or rendering farms. But, one option recently got attention: The potential fork of proof-of-work Ethereum, which will enable miners to do what they are doing.

What is Ethereum Proof-of-Work (PoW)?

How Ethereum Transition To PoS Would Be Different From PoW?

Think about who will not be excited about this Merge.

Well, like miners, maybe someone who liked PoW and invested a great deal of money in PoW.

According to reports, The Merge is estimated to be around $19 billion Ethereum mining industry and rigs. Ethereum miners are interested in putting their equipment to work elsewhere.

Although, Vitalik Buterin suggested they could go for Ethereum Classic (the original Ethereum) that the current chain forked away from.

However, this is not the plan of miners. For now, EthereumPoW is supposed to become a hard fork of the current chain, which would become PoS. This would make EthereumPoW the fork of a fork. The existence of 3 Ethereum chains is confusing, but EthereumPoW brings several problems.

$ETC is the original chain. $ETH is a fork. And $ETHW is a fork of a fork. pic.twitter.com/0PkIYu4RrE

— Donald McIntyre (@RocketETC) August 5, 2022

What Are The Problems That Arose From ETH PoW Fork?

A hard fork breaks a blockchain into 2 different chains. In this case, ETHPoW and ETHOS. The fork would duplicate all the chain’s NFTs, tokens, and native coins. Even the liquidity on DApps would also be duplicated. For instance, if you possess 10 ETH, 10K USDC, and a liquidity provider position pre-fork, you would get the same assets on both chains after the fork.

Now, you think you can easily double your investment via ETH PoW. Right?

Yes, if it were that much easy.

You can double a network but not its value. If you make a copy of Wikipedia, you would have all the information but not the contributors adding or editing it.

Likewise, a PoW fork of Ethereum won’t have the community or developers and, more significantly, won’t have a stable coin or DApps issuers honouring their commitments.

In other words, your stablecoin on ETH PoW would instantly go to zero value. Your LP positions on money markets would instantly be drained of their liquidity for ETHPoW.

On the other hand, Oracles would be seen in support of Ethereum, not Ethereum PoW. Defi on Ethereum PoW would be dead on arrival.

Moreover, there are two more issues!

First, ETHPoW will retain some value, at least in the beginning. You can consider a fork like an airdrop of ETHPoW to ETH holders. But bots are likely to drain all the liquidity pools for ETHPoW and extract all the value in the ecosystem.

Some miners are getting behind ETHPoW in what has been considered a nefarious plan to dump on unsuspecting retail. Second, this entire plan shows the ugly face of crypto. That of self-interest and using uninformed users for exiting liquidity.

So we can say that Ethereum PoW would have to go through the toughest part, forking the chain again to get around the in-built difficulty of bomb-making mining unfeasible with time.

Can You Gain Profit From ETH PoW?

Maybe yes, or maybe no!

Yes, as users with Ethereum would have the same amount of ETHPoW after the fork. ETHPoW is trading at $69 on Gate.io, Poloniex, CoinW, MEXC, and DigiFinex.

This can be a nice airdrop, though you can expect a lot of dumping after the Merge is completed. Its worth would surely not be high enough to buy ETH just to get an “airdrop.”

But also No, as trying to clear the liquidity pools of the liquidity is an expert’s game and not one to e played by the average DeFi users.

Conclusion

So far, we have discussed major points about the consensus mechanism Ethereum used and will use in the future. This is a never-ending debate on the Ethereum transition of PoS; a new chapter has been added which prevails different questions.

Tags: Ethereum MergeEthereum newsProof of workproof-of-stake
Share76Tweet47
ADVERTISEMENT
Previous Post

The new NFT Community and Rewards Program from Starbucks will be implemented using Polygon (MATIC).

Next Post

Just after the Merge, the Ethereum community generates PoS NFTs

Hania

Hania

Hania is a 30-year-old blogger who used to be a teacher before entering the world of writing. She is originally from India and has been writing blogs on various topics for 2 years now. Hania is particularly interested in exploring the intersections of finance, technology, and cryptocurrency. Her experience as a teacher has given her unique insights into the ways in which digital media can be used to facilitate learning and engagement. Through her writing, Hania hopes to share her knowledge and learning of crypto industry with everyone.

Related Posts

Polymarket Bets
General News

March 2025 Polymarket Bets Boom for Bitcoin, XRP, ETH, AI, and DOGE – The Future of Cryptocurrency Trading!

March 1, 2025
Ethereum’s Pectra Upgrade
General News

3 Essential Insights from Recent Developer Call on Ethereum’s Pectra Upgrade

March 1, 2025
Cramer Suggests Saylor Should Plan for a Strategic Bitcoin Reserve
General News

Cramer Suggests Saylor Should Plan for a Strategic Bitcoin Reserve

February 28, 2025
MetaMask Ethereum Wallet Expands Support for Both Bitcoin and Solana
Crypto Wallets

MetaMask Ethereum Wallet Expands Support for Both Bitcoin and Solana

February 28, 2025
Bitcoin Bull Run Could Continue, says CryptoQuant CEO - Unless This Critical Threshold Is Breached
General News

Bitcoin Bull Run Could Continue, says CryptoQuant CEO – Unless This Critical Threshold Is Breached

February 28, 2025
Solana Futures Launch at CME Boosts Price Amid High Demand
General News

Solana Futures Launch at CME Boosts Price Amid High Demand

February 28, 2025
Next Post
Just after the Merge, the Ethereum community generates PoS NFTs

Just after the Merge, the Ethereum community generates PoS NFTs

Discussion about this post

Live Prices

You have not selected any currency to display

Stay Connected

You May Also Like

  • Bitcoin Halving Update: Bitwise CEO's $100k Price Projection Sparks Excitement

    Why the Bitcoin Halving Is Happening Sooner Than Anticipated

    239 shares
    Share 96 Tweet 60
  • MetaMask Ethereum Wallet Expands Support for Both Bitcoin and Solana

    197 shares
    Share 79 Tweet 49
  • March 2025 Polymarket Bets Boom for Bitcoin, XRP, ETH, AI, and DOGE – The Future of Cryptocurrency Trading!

    196 shares
    Share 78 Tweet 49
  • OKB Price Prediction 2023 – 2030: Will OKB reach $200?

    201 shares
    Share 80 Tweet 50
  • November’s Bitcoin Price Forecast: A Bullish Odyssey

    196 shares
    Share 78 Tweet 49
  • About Us
  • Contact Us
  • Work With Us
  • Privacy Policy
  • Terms Of Service

© 2022-2024 CryptoMufasa - All Rights Reserved!

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms bellow to register

*By registering into our website, you agree to the Terms Of Services and Privacy Policy.
All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • General News
  • Beginner Guides
  • Bitcoin News
  • Ethereum News
  • Altcoin News
  • NFT News
  • Price Predictions
  • Google News

© 2022-2024 CryptoMufasa - All Rights Reserved!

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
Don’t Miss Out on the Best in Crypto!

Stay ahead with a weekly digest of the top news and insights—no spam, no ads, just the essential updates delivered straight to your inbox. Subscribe now for valuable content you can trust!

johnsmith@example.com
subscribe to email

Never see this message again.