One of the world’s leading crypto, Ethereum, is about to switch to a Proof of Stake (PoS) protocol. It should happen “in the coming months”. The development team expects this transition to reduce the network’s energy consumption by 99.95%. That’s really impressive! Also, this transition is supposed to bring positive changes and many benefits for gamers since using video cards for cryptocurrency mining will become pointless.
Briefly About PoS
Proof of Stake is a security method in cryptocurrencies based on the need to prove the storage of a certain amount of funds in the wallet. This method implies that the cryptocurrency algorithm is more likely to pick an account with a large number of coins to confirm the next block in the chain. It sounds similar to the Proof of Work (PoW) protocol, where the owner of more powerful equipment has more chances of creating the next block. Today, most cryptocurrencies are based on the PoW protocol; some use both methods simultaneously, though. Both protocols have their pros and cons.
Why Transition To PoS?
By switching to PoS, the Ethereum Foundation expects to increase network efficiency by 2000 times and reduce power consumption by 99.95%. The Ethereum network currently consumes about 44,49 TWh per year, which could actually supply a large metropolitan.
Gaming video cards are suitable and massively used for Ethereum mining. However, such cards are now in short supply. Once the transition to PoS happens, there will be no point in using those powerful video cards for crypto mining because PoS suggests an entirely different approach to receiving new coins. It does not necessarily mean huge discounts for video cards shortly – the transition will take some time.
What remains to ETH miners?
Ethereum miners can switch to alternative projects running on the PoW protocol.
After Ethereum’s transition to PoS, miners, who currently mine Ethereum using video cards, will gradually start switching to another cryptocurrency, and most likely, it will be Ethereum Classic. At the initial stage after the transition, large Ethereum holders will take care of confirmation and recording blocks in the Ethereum blockchain.
There’s no doubt that the transition to PoS will impact the entire crypto market. Miners will be the first to face those changes since ETH mining on video cards used to be the most profitable option. However, before it happens, we must put up with a GPU shortage and high prices for video cards.
Previously we wrote that the Ethereum Foundation team announced the transition to a new consensus protocol on September 19, 2022.