One of the leading cryptocurrencies Ethereum got rid of the need for mining. The effect of this event, which happened today at 9:43 Kyiv time and is called The Merge, is equal to the shutdown of electricity consumption in Finland. Instead of a Proof-of-Work (PoW) confirmation algorithm that involves mining, Ethereum will use a Proof-of-Stake (PoS) system that involves rewards per share.
The value of Ethereum after the Merger dropped less than 1% to $1605 within the first few minutes and remained virtually unchanged thereafter. In the two weeks leading up to the Merger, the price of Ether rose by 4% but is still down 15.5% from the previous month.
Ethereum miners will be replaced by validators who have sent at least 32 ETH to a special address from which the cryptocurrency cannot be withdrawn. The reward for a new block in the blockchain will be randomly distributed among the validators. The larger the “bet” made by the validator, the higher the probability of the reward. The winner receives the transaction fee and additional ETH. It is also expected to be rewarded for other actions related to protecting the network.
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PoS also significantly reduces the likelihood of a “51% attack” – collusion by the owners of more than half of the hashrate of the network in order to control it. Now such actions will be accompanied by the risk of significant losses.
However, do not think that Ethereum miners will definitely need to curtail their activities. Ethereum Classic and a number of other cryptocurrencies run on the same Ethash encryption algorithm. The transition to their “prey” can take minutes with careful preliminary preparation. There are also many other algorithms and cryptocurrencies. The only question is the monetary value of these crypto assets – however, most likely, it will rise if demand increases.
In connection with the merger of Ethereum, the largest Ethermine mining pool has closed its work and is switching to withdrawal-only mode
Source: CoinDeck
