Ethereum mining and PoS are ‘prohibited’, says data provider


As Ethereum (ETH) nears merger, the debate over its transition to a proof-of-stake (PoS) network seems to be growing. Many people have expressed concerns about the current centralization of Ethereum’s validator nodes, saying that moving to a PoS system would make things worse.

This led to the rise concerns among crypto investors that the current proof-of-work (PoW) system might not be as secure as it should be, and that a shift to PoS would mean that only one entity could, with a possibility of 51 %, attack the network.

For years, the move to proof-of-stake for Ethereum has been delayed. “We thought it would take a year to set up the point of sale, but it took about six years,” said Ethereum co-founder Vitalik Buterin.

According to a Tweeter by Maggie Love, co-founder of Web Cloud, “Ethereum cannot be decentralized if the stack is not decentralized.” She highlights the 69% of nodes hosted on the ETH mainnet, “of which more than 50% come from Amazon Web Services (AWS), more than 15% from Hetzner and 4.1% from OVH”.

In anticipation of the upcoming merger, various platforms using the Ethereum blockchain have announced their contingency plans. Under the PoS system, crypto investors stake a specific amount of their cryptocurrency on the standard grid, rather than using large amounts of electricity to generate more cryptocurrency.

Ethereum merger on the stablecoin

Even if none of these issues arise, the future of stablecoins still poses a major challenge for the decentralized finance (DeFi) industry. With centralized stablecoins dominating decentralized protocols, many DeFi projects have considered algorithmic stablecoins. But there are still potential regulations for stablecoins that could impact DeFi after the Ethereum merger.

The market for stablecoins is huge, with a market capitalization of over $100 billion, and their use on public blockchains like Ethereum has grown significantly, making them indispensable for DeFi operations. But as the Ethereum network nears merger, the stability of these assets becomes more important than ever.

The Ethereum merger, scheduled for September 15, could potentially affect the stability of digital assets pegged to real-world currencies. Most DeFi applications could be hosted on the Ethereum blockchain after switching its current PoW consensus mechanism to PoS. The upcoming Ethereum fork to replace the PoW consensus system with a PoS system is expected to accelerate Ethereum’s development towards an institutional-grade investment.

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