Ethereum Proof of Stake prepares to blasts off as the merge approaches.
Background
- Ethereum is merging or joining it’s Proof of Work blockchain and Proof of Stake blockchain this fall, possibly this month.
- This is the end or culmination of a multiple year project to change the method of consensus on Ethereum from Proof of Work, like Bitcoin, to Proof of Stake like Hive.
- The simplified explanation for the transition from proof of work to proof of stake is functional and political.
- The political reason is that Proof of Stake consumes less electricity and thus generates less carbon dioxide then Proof of Work.
- So it is environmentally more friendly then Proof of Work.
- The functional reason is that the Proof of Stake blockchain will increase transaction speed and transaction volume on the Ethereum blockchain.
- Although the original narrative was that it would lower gas prices, that has been disproven and is no longer part of the narrative around Ethereum Proof of Stake.
- Lastly, the new POS blockchain will increase speed and capacity geometrically, initially 4x in crease, then 8x, 16x, 32x and eventually 64x.
- This is impressive, but it is dwarfed by the increase in daily transactions on the Ethereum blockchain, which increasing exponentially 10x, 100x or 1000x.
- You can read all about this by reading the papers published by the creator of Ethereum Vitallic Buterin.
- You can follow his creators thoughts and journey as he was once a prominent member of the Bitcoin Community, and left to create Ethereum because the Bitcoin Foundation was opposed to adding Smart Contract function to Bitcoin.
- You can read of his joy, as he originally envisioned POS as solving all of Ethereums speed and capacity problems.
- But as brilliant as he is, he didn’t envision DeFi becoming as big as it is on Ethereum.
- And he didn’t expect the exponential increases in daily transactions on Ethereum caused by DeFi. These exponential increases of 10x, 100x and 1000x as DeFi grew from 100 million to 100 billion, a 1000 fold increase made his geometric increase in speed of 4x, 8x, 16x afforded by proof of stake inadequate even before the Proof of Stake transition could even finish. The yet unborn proof of stakes capabilities are already inadequate.
- But not to be outdone by the DeFi activities of mere mortals, Vitallic Buterin embraced the idea of the multiple blockchain ecosystem and something very similar to what we have on Hive, Hive-Engine!
- Yes, sidechains were born on Ethereum and a new cryptocurrency term second layer solutions was also born.
- In simplistic terms, second layer solutions for Ethereum provide exponential, and currently 1000x increases in speed compared to Ethereum.
- These exponential growth chains include Polygon, Arbitrum and others.
- Each generation of Ethereum sidechain is of increasing complexity, and increasing speed, capacity, and improved security.
- These so called second layer solutions offer exponential increases in transaction speed and volume to match the speed of the growth of DeFi.
- Terrific!
- Polygon alone provides 1000x increases in speed, which dwarf to geometric increases by Ethereum POS.
- But POS is still a technological breakthrough compared to the original proof of work chain, as well as a vivid demonstration of the rapid progress in technology, as ideas of brilliant minds, which once weren’t possible, become possible.
- We live in incredible times.
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