Proof of Stake is a Precondition to Blockchain Adoption
It was unfortunately admitted earlier this month that Ethereum 2.0 is taking much longer than was initially expected. Among the many changes that Eth2 will include is the transition from a Proof of Work(PoW) to a Proof of Stake(PoS) consensus mechanism.
The world is increasingly eyeing this transition after the sustainability issues of Bitcoin and Ethereum mining made headlines over the past couple of weeks. Ethereum mining alone consumes 52.2 Terawatt-hours a year and has an annual carbon footprint comparable to the entire country of Jordan.
The transition to Proof of Stake, in contrast, is expected to allow the Ethereum network to consume around 99.95% less energy. To understand how we’re going to take a deeper dive into the technology and economics behind consensus models.
In order to prevent people from adding fraudulent transactions to the blockchain, every new block has to be validated in a process called mining. The logistics of mining that a cryptocurrency employs are known as its consensus model. In order to incentivize people to validate these new transactions, transaction fees and block rewards are usually given to the miner.
