Ethereum mining will stop soon: what awaits the cryptocurrency in the future
Vitalik Buterin, who created the second cryptocurrency by capitalization, Ethereum, said that it would soon be mined in a different way.
On his Twitter, Willy wrote that during the Shanghai Summit, Buterin announced the transition of the Ethereum network from the Proof-of-Work algorithm (proof of work) to the Proof-of-Stake algorithm (proof of stake).
Referring to Buterin, Wu wrote that the transition will take place in August 2022. If any problems suddenly arise, the developers will postpone the transition to September-October.
Note that from the moment of its creation and until now, the Ethereum network has been working on the PoW algorithm, which allows the participants of the blockchain network to perform certain tasks (for example, add new blocks to the blockchain network) and freely check the results of the work done. The process of finding such blocks is called mining, therefore, PoW requires special equipment with high computing power, large amounts of electricity, and a person who will control the operation of the equipment (miner).
A PoS network, unlike PoW, does not need miners or the high computing power of their equipment. In this case, holders (owners) of cryptocurrencies will be responsible for the formation of the blockchain. They, like miners, will also be able to earn by receiving rewards for staking. The holder with the largest number of coins will be able to mine new blocks, and the proof of the correctness of the completed task will be the presence of the largest number of coins in his account. At the moment, according to this principle, blocks are mined in the networks of EOS, Tezos, TRON, Cosmos.
Buterin promised to transfer Ethereum to PoS last year. Vitalik was concerned about how negatively mining affects energy consumption, which negatively affects the environment. The Ethereum network, by stopping mining on video cards, is supposed to help reduce energy consumption by 99%. Elon Musk also promised to solve the problem of mining.