New Etherum update EIP-3554 has the potential to disappear the mining of the coin by the end of this year. Etherum is now working on the proof of work but this update will shift it to the proof of stake mechanism.
New coins of almost every cryptocurrency are obtained by the process of mining. For example, bitcoin and Etherum work on the principle of Proof of Work (PoW). The miners provide a certain amount of computational power to solve the mathematical puzzle which is for the protection of transactions being made across the globe and in return get the coins as a reward. This PoW method consumes too much power and causes the earth to heat up.
Etherum uses a difficulty bomb to control its mining operation. The difficulty bomb pushes the miners to update their software after a predetermined time. When the bomb detonates it pours artificial miners into the Etherum mining system which results in the rise of difficulty. The rise in difficulty reduces the miners’ reward.
New Etherum update EIP-3554:
There is another method known as Proof of Stake (PoS) for mining in which the person holding the coin will validate the transaction and in return will get new coins as a reward. This “New Etherum update” is going to change the Etherum mining from Proof of Work (PoW) to Proof of Stake (PoS). The supply of coins will also be in control by this method and energy shortages by crypto will also be dealt with.
Proof of Stake workflow for Etherum is under testing phase on a chain called Beacon since December 2020. According to Tim Beiko, the coordinator for Ethereum’s protocol developers, Beacon solves these challenges.
We knew that there would be a lot of technical work to address things like the increased centralization that we see in other proof-of-stake systems. We’ve achieved that with the Beacon chain, where there are one or two orders of magnitude more validators than any other proof-of-stake networks.
This New Etherum update will change the face of mining and will remove the objections of so many people who argue about too much energy usage. For more interesting content click here.