Značka: Proof-of-Work

Ripple chair's pay-off plan to convince BTC miners to adopt Proof of Stake

Executive Chairman and Co-founder of Ripple Chris Larsen has unveiled his plan for Bitcoin miners to move away from Proof of Work (PoW), saying they should view it as “a net positive for their longevity.”He argues it could provide a major boost to the share prices of listed mining firms “as any new code proposal would almost certainly have to include lucrative incentives to gain their support.”PoW is the consensus algorithm that secures Bitcoin (BTC) transactions on the blockchain. While the Bitcoin network is the most secure and reliable, the amount of energy BTC mining requires causes endless debate in the crypto space. In a Nov. 10 blog post Larsen wrote:“The emerging solution among climate experts is that Bitcoin’s code needs to be changed to a low energy consensus algorithm like those used by nearly all other major crypto protocols. For example, while Bitcoin uses the energy of approximately 12 million US homes per year, other methods could drive that to fewer than 100 US homes.” Ethereum is already halfway through the switch to Proof of Stake. While Larsen said this would make Bitcoin an “outlier” he concedes that any similar change would be opposed by most Bitcoin mining companies. However he’s proposed a solution to fairly distribute the “900 Bitcoin per day” from block rewards and the “approximately 2.1 million additional Bitcoin are to be distributed through the year 2140.”He suggests that the “least disruptive” solution to BTC’s energy problem is to “take a snapshot of the current hash rate of existing miners and then reward miners on a pro-rata hash power basis.” “Existing miners would simply have rights to future Bitcoin rewards without the need to expend additional energy or make additional investments in mining rigs.”The billionaire businessman explained that his plan would give miners “additional economic benefit” and “lucrative gains” because they would gain the same revenue with less operating costs going towards their power bills. He suggested the “future rewards […] could be held and tokenized,” concluding that “while the process to enact these plans with consensus across the Bitcoin community will take time, the benefits far outweigh the risks.”“These assets could be extremely lucrative to existing miners, especially as Bitcoin goes from its current climate disaster status to a truly green financial technology of the future.”Larsen specifically referenced several U.S. mining stocks including Stronghold Digital Mining (SDIG), Hive Blockchain Technologies (HIVE), Canaan (CAN), Riot Blockchain (RIOT), BIT Mining (BTCM), Bit Digital (BTBT), Bitfarms (BITF), and Marathon Digital Mining (MARA).Related: Proof-of-stake vs. proof-of-work: Differences explainedNeedless to say, the proposals are unlikely to be welcomed by Bitcoiners — or miners who have ambitious plans to increase their share of the hashrate and would miss out on additional revenue through this plan. And judging by the controversy over changing the blocksize, if the proposal did gain some support it would almost certainly lead to a PoW fork.

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Coinbase adds 'ETH2' despite tomorrow's Ethereum upgrade postponing difficulty bomb

Cryptocurrency exchange Coinbase has added a mirrored version of the Ethereum blockchain’s native token Ether (ETH) to its crypto price index, just ahead of a key network upgrade on Dec. 10.Dubbed “ETH2,” the symbol appeared to have been tracking the original Ether market data synchronously. For instance, the cost to purchase ETH2 came out to be the same as that for ETH. Meanwhile, their market capitalization, volume, circulating supply, and price changes were also identical.Coinbase is already promoting eth2 as a new coin? pic.twitter.com/C67UxooLU0— Nuno (@nvcoelho) December 6, 2021Nonetheless, unlike the original, the ETH2 token had no Trading Activity, Popularity Score, or Typical Hold Time, underscoring that its role — for now — is to merely track the ETH market data at least until mid-2022.ETH vs ETH2.0 market data. Source: CoinbaseThat is probably as ETH2 seems to have been posing as the native token of Ethereum’s ongoing upgrade, dubbed Ethereum 2.0, which expects to go live fully by June 2022. But the Coinbase’s index listing appears closer to “Arrow Glacier,” a fork that would give developers more time to prepare for Ethereum 2.0.Before Ethereum 2.0The Arrow Glacier update aims to delay a so-called “difficulty bomb,” an incentive hardcoded inside the Ethereum blockchain since its launch in 2015, which would make it difficult for people to mine Ether. In doing so, the BOMB, if triggered, would slow down the Ethereum network, for as long as it remains proof-of-work.Tim Beiko, one of the core developers working on the Ethereum upgrade, noted that Arrow Glacier might be the last upgrade before Ethereum 2.0 goes live next year. Meanwhile, Coinbase appears to have been treating the Arrow Glacier fork as a confirmation that they would exist a new token called ETH2 after the Ethereum 2.0 upgrade.In detail, Ethereum 2.0, also known as “Serenity,” would enable significant changes to its design, including a full-scale transition from energy-intensive Proof-of-Work (PoW) — also used by Bitcoin (BTC) — to Proof-of-Stake (PoS).In the current version, nodes must validate every transaction to maintain Ethereum’s public ledger. But the Ethereum 2.0 upgrade would launch “sharding,” which would divide the network into various segments (called shards) and would randomly assign nodes to each shard. Beacon Chain and Sharding. Source: Vitalik.caThat would remove the need for each node to scan the entire chain, theoretically improving the speed and costs required to maintain the network. Meanwhile, individual shards would share the transaction details with a so-called Beacon Chain, which serves as the backbone of Ethereum 2.0.ETH2 is not a new cryptoBeacon Chain, which went live in December 2020, would validate the transactions on each shard, thus assisting the entire Ethereum 2.0 network reach consensus. It would also detect dishonest validators and initiate penalties by removing a portion of the validator’s stake from circulation.Related: Vitalik Buterin outlines ‘endgame’ roadmap for ETH 2.0At the core of Ethereum 2.0’s PoS design would be ETH (or ETH2), which primarily serves as a staking token for validators to participate in the network consensus and, in turn, to receive block rewards for it. Beacon Chain’s deposit contract has received over 8.42 million ETH tokens from 55,300 unique depositors (validators) since its launch in December 2020.The balance of the Ethereum 2.0 deposit contract divided by the total ETH supply. Source: CryptoQuantThat being said, ETH2 is not a new coin and would not change the ETH amount one holds. Instead, as Coinbase’s index listing suggests, ETH2 may end up becoming a rebranded version of the original Ether, without needing holders to swap one version for another.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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