Open source blockchain network Ethereum is set to scrap “proof of work mining” in favor of a more efficient “proof of stake” protocol called Casper. Casper’s rollout has been in the works for a number of years – however, it has experienced several delays. It is expected to be fully operational by the end of this year according to Bloomberg.
Proof of work mining – which is also used to operate the bitcoin network – has many downsides that have been a constant headache for developers. Proof of work mining requires immense computing power and energy to validate and authenticate transactions, and also leaves smaller networks vulnerable to a 51% attack.
Switching to a proof of stake model solves a number of major problems for the Ethereum network. By requiring a proof of ownership or stake – rather than a proof of work – the need for expensive, power intensive mining equipment is eliminated, as the process of validating and authenticating transactions is much faster and easier. It also forces people to take an ownership position in Ethereum, giving people an incentive to work in the best interest of the network. Additionally, switching to a proof of stake model makes the Ethereum network more usable for average, non-technical people, and more scalable to accommodate larger applications.
Despite a number of benefits, the proof of stake model has received mixed reactions from those in the cryptocurrency community. According to Vitalik Buterin, co-founder of Ethereum, “proof of stake continues to be one of the most controversial discussions in the cryptocurrency space. Although the idea has many undeniable benefits, including efficiency, a larger security margin and future-proof immunity to hardware centralization concerns, proof of stake algorithms tend to be substantially more complex than proof of work-based alternatives, and there is a large amount of skepticism that proof of stake can work at all.”
This article was originally published on TheFintechBuzz
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