Ethereum has successfully completed its merge to Ethereum 2.0 on September 15th. With this merge brings new features for Ethereum which include the networks scalability, accessibility, security and more. Here are some of the major features and differences.
Proof of Stake vs Proof of Work and what it means for Crypto Mining
For Ethereum 2.0 one of the biggest changes was the switch from a Proof of Work to a Proof of Stake Model. Proof of Work is an algorithm to mine new blocks on its blockchain. Using the proof of work model, miners compete against each other to validate blocks and earn rewards. It is a mathematical process that takes a lot of computing power to complete. In return for their work, miners are rewarded with Ethereum.
The proof of Stake Model that is now currently used by Ethereum is a much more energy efficient and secure model than Proof of Work. With Proof of Stake users stake their Ether (the native cryptocurrency of Ethereum) to validate blocks instead of miners
Switching to Proof of Stake has now made Ethereum much more energy efficient. No longer does it require huge mining farms full of computers validating blocks on the network. Mining has received a lot of negative attention in the media for the amount of energy it requires to run the network. It will also help with the GPU shortage since many mining farms have been scooping up all the latest GPUs before people can buy them. Ethereum 2.0 could help improve the image of crypto and attract more investment.
“The Future of Ethereum”
Another major upgrade is scalability due to the implementation of sharding. Sharding is a database or search engine technique to break up huge amounts of data into smaller chunks. Ethereum 2.0 will spread the network load across 64 separate shards. This will lead to being able to process more transactions
For Security Ethereum 2.0 is an improvement. With the Proof of Stake model, attackers must put their money on the line in order to attempt a 51% attack. This is a big deterrent. Whereas attackers don’t lose their hardware when attempting 51% attacks on systems with the Proof of Work Model.
What you need to know
- If you owned ETH before the merge, you don’t need to do anything, according to Ethereum’s website.
- The merge will not result in lower gas fees they are a product of network demand relative to the network’s capacity.
- There may be more scams, this could include Phishing, Airdrop, Support Scams, and ETH2 swap scams. So be on the lookout. Scammers may say that you need to swap to an ETH2 token to use Ethereum 2.0 which is not needed.