Thanks to the proof of stake (PoS) consensus mechanism, a greener future is on the horizon for Ethereum, which will make the efficiency of the network two thousand times more.
A report by the Ethereum Foundation noted:
“With proof-of-stake being aorund 2000 times more efficient than proof-of-work, the energy expenditure of Ethereum will be roughly equal to the cost of running a home computer for each node on the network.”
The Ethereum Foundation also acknowledged that the PoS framework would trigger a 99.95% reduction in total energy use.
The Ethereum network uses a proof-of-work (PoW) system where miners solve a computational puzzle to validate a block.
Nevertheless, for the PoS consensus mechanism, validation of blocks is dependent on the amount of ETH staked because it is used as collateral against dishonest behaviour. Furthermore, validators will be required to have 51% of the total ETH staked running in the network to maintain a fraudulent blockchain.
The Ethereum Foundation stated that a transition to the proof of stake from the present proof of work is expected to happen in the second quarter of 2022. However, the Ethereum 2.0 deposit contract launched in December 2020 shows the viability of the PoS consensus mechanism.
Meanwhile, the proof of stake framework has gained steam in 2021 based on some of the advantages it presents, like cost-effectiveness and environmentally friendliness.
As a result, PoS networks like Solana, Polkadot, and Cardano are opening opportunities for staking-as-a-service (STaaS) providers.
With staking involving locking up crypto assets for a certain period of time to earn interest or rewards, this market is experiencing significant growth. For instance, Solana recently emerged as the most staked crypto with a value of $78.49 billion.
Image source: Shutterstock