The proof-of-stake (PoS) algorithm has been implemented on the Ethereum network thanks to the Merge upgrade. The new system uses orders of magnitude less electricity because it no longer relies on miners to verify transactions. As a result, there may soon be an oversupply of inexpensive used graphics cards on the market.
Ethereum has finally changed from using proof-of-work (PoW) to proof-of-stake as its consensus mechanism (PoS). The Merge, an upgrade that has been in the works for more than ten years, provides the network numerous notable improvements.
On September 6, the Bellatrix hard fork went live, preparing the blockchain and ushering in the first stage of the Merge. Following that, all that had to be done was to wait for the Terminal Total Difficulty block to be mined, which would activate the alleged Paris upgrade. It simply took place earlier today.
In order for Ethereum’s Proof-of-Work (PoW) system to function, crypto miners had to compete to add transactions to its ledger by cracking cryptographic puzzles (earning Ether in exchange).
This operation used a lot of energy; one Ethereum transaction used 200 kWh, about what a US household uses in a week. In actuality, the entire network consumed 78 TWh annually, about equal to Chile.
However, the new PoS algorithm necessitates that validators hold and stake tokens (min. 32 ETH in this case). It functions in a manner akin to lottery tickets. You are more likely to be chosen to add a block of transactions to Ethereum’s digital ledger, which would result in incentives, the more ETH you stake. With over 99.9% less energy predicted to be used by the Ethereum network, this technology is much more energy-efficient. This will result in a 0.2% decrease in the world’s electricity consumption.
The Merge is good news for gamers as well because it should prevent a GPU drought like the one we’ve just gone through for the past two years by phasing out mining. According to reports, cryptocurrency miners made $733 million last month. Others may sell their machines to recuperate their investments, while some will switch to other GPU-minable currencies. As a result, used graphics card costs are probably going to decrease even further. However, you should be cautious before purchasing one because they usually lack warranties and have been operating at full capacity for several weeks or months.
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