Ethereum is a decentralized, open source blockchain platform that enables the creation and execution of smart contracts, decentralized apps (dApps), and a host of other technologies. After Bitcoin, Ethereum is probably the most well known cryptocurrency, and unlike Bitcoin the Ethereum network offers a far broader range of possibilities. The Ethereum cryptocurrency is also the most valued and widely used cryptocurrency after Bitcoin.
Ethereum has been around for many years, and has been evolving in many ways. Most recently, Ethereum has been upgraded to Ethereum 2.0. Ethereum 2.0 is a long awaited upgrade to the Ethereum network that aims to address many issues currently facing the blockchain. A few areas that Ethereum 2.0 hopes to improve are scalability, security and energy efficiency.
One of the most significant changes proposed in Ethereum 2.0 is the move from a proof of work (PoW) mechanism to a proof of stake (PoS) consensus mechanism. This change will both increase the scalability of the network and reduce the negative environmental impact caused by the energy intensive PoW. The increase in scalability will occur by allowing a far greater number of transactions to be processed per second.
Proof of work and proof of stake are two different mechanisms that are used to validate transactions and create new blocks on the blockchain. There are advantages and disadvantages to using either consensus mechanism.
Here are a few benefits and drawbacks to proof of stake:
Benefits of PoS over PoW:
Drawbacks of PoS over PoW:
Ethereum 2.0 is set to be a game changer, and carries many upgrades that users have long waited for. Due to the changes being so significant, only time will show us how Ethereum 2.0 is in fact an improvement from its predecessor.
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