Ethereum 2.0 - When Is Ethereum Moving To Proof Of Stake (POS)? » Bulliscoming (2022)

It’s no secret that Ethereum is planning to move from its current consensus protocol, Proof-of-Work (PoW) to Proof-of-Stake (PoS). The current plan is for Vitalik Buterin and others to come up with a version 2.0 of the Ethereum platform – which is commonly known as “Ethereum 2.0”.

I have been seeing a lot of controversies online about Ethereum moving to Proof of Stake (POS) – of which some people’s opinions indicate that we should expect the switch in 2022 while some say we shouldn’t expect any switch until next year – 2023. This has begged the question “when is Ethereum moving to proof of stake (POS)?”.

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However, I’m not going to get into too many details or technical information, but this article will help clarify what POS is, what it means for Ethereum, and when exactly we can expect the switch to Ethereum 2.0.

But before then, it’s imperative to know what Ethereum is all about.

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What Is Ethereum?

Ethereum 2.0 - When Is Ethereum Moving To Proof Of Stake (POS)? » Bulliscoming (1)

Ethereum is a revolutionary platform that allows developers to build decentralized applications (or Dapps), run smart contracts, and create their cryptocurrency (the famous ERC-20 tokens like UNI of Uniswap).

Ethereum was co-founded by Vitalik Buterin, Charles Hoskinson, and others. The project went live in 2015, and it has seen rapid growth since then.

(Video) ETHEREUM 2.0 - A GAME CHANGER? Proof Of Stake, The Beacon Chain, Sharding, Docking Explained

Like it was mentioned earlier, Ethereum is a platform for decentralized applications that are secured by the blockchain. It’s been called “programmable money,” and its cryptocurrency, ether, has seen immense growth in 2017.

How Does Ethereum Work

If you haven’t heard of blockchain before, think of it as a giant decentralized ledger that keeps track of transactions made in Bitcoin and other cryptocurrencies. Every single transaction made with Bitcoin (or any other cryptocurrency) is recorded in the blockchain, and available for anyone to view online. The chain grows continuously, and the consensus protocol ensures that the entire network agrees on which transactions are valid. This means no one can spend money they don’t have, or corrupt the ledger in any way.

The Ethereum network functions using smart contracts. This means that instead of simply keeping track of financial transactions as Bitcoin does, Ethereum can be used to build complex applications that can run without any server downtime, tampering, or control from third parties.

Simply put, Ethereum is a decentralized platform that runs smart contracts, which are applications that run exactly as programmed without any possibility of downtime, censorship, fraud, or third-party interference. The Ethereum Virtual Machine (EVM) is the runtime environment for smart contracts in Ethereum.

To encourage developers to make use of this platform, the Ethereum network offers Ether as a reward for processing transactions and making use of the computing power in the system. Ether is therefore similar to Bitcoin in its function but has an entirely different purpose.

Ethereum enables developers to build different types of applications on top of its blockchain. The applications can be anything from gambling, finance, health care, and gaming., Smart contracts are contracts that are executed automatically if certain conditions are met – this is what makes these Dapps possible.

The native token of Ethereum is called Ether (ETH). Developers who build on Ethereum need it to pay for transactions and services on the network. For example, if you want to store a transaction or piece of data in the network you need to pay some ETH for it. When someone wants to execute your smart contract they have to pay gas in ETH which gets distributed among all the nodes in the network for executing that transaction.

The Ethereum network runs on a blockchain secured by miners executing a Proof of Work consensus algorithm.

What Is Proof Of Stake?

Ethereum 2.0 - When Is Ethereum Moving To Proof Of Stake (POS)? » Bulliscoming (2)

Proof Of Stake (POS) is an alternative consensus mechanism to Proof Of Work (POW) – that is used to validate transactions in the blockchain network.

Proof Of Stake is more energy-efficient than Proof Of Work – as it requires any participant in the network to stake their crypto asset to become a validator in the blockchain network.

Validators are selected based on the amount of crypto-asset (the blockchain native token) they hold and stake without any more high computational power, unlike POW.

Why Do We Need a New Ethereum?

Ethereum has already attracted a huge array of developers, who have built a variety of distributed apps (dapps) on it.

But Ethereum isn’t just useful for finance – it can be used to build censorship-resistant social media, games, voting systems, and much more.

(Video) Ethereum is Dead. How to PROFIT from THE MERGE to ETH 2.0

However, Ethereum has some serious problems.

The current version of Ethereum runs on a Proof-of-Work (PoW) blockchain. PoW blockchains have some significant limitations. They’re slow and expensive to use because they require each transaction to be verified by multiple computers around the world (miners).

This also means that they consume large amounts of electricity, which adds to their costs.

The basic argument is that Ethereum’s “proof-of-work” consensus model is a bottleneck, making it too expensive to run and too limited in capacity — a problem that will only get worse as the network grows. A new system based on proof-of-stake would be safer and cheaper to run, but it would require a completely new blockchain, which can’t be created by modifying Ethereum 1.0 (or “Ethereum Classic,”).

The current iteration of Ethereum has a lot of problems with scalability and sustainability, which have led to high fees and issues with network congestion.

So far, so obvious — we’ve known for years that proof-of-work isn’t good enough for mainstream adoption of blockchain technology.

When Is Ethereum Moving To Proof Of Stake (POS)?

Ethereum 2.0 - When Is Ethereum Moving To Proof Of Stake (POS)? » Bulliscoming (3)

Ethereum is the hottest blockchain in the crypto world and thousands of people are looking to invest in it.

Ethereum has been stuck at the Proof of Work (PoW) consensus algorithm since its inception. During that time, it has endured a lot of criticism – which had begged the question: “when is Ethereum moving to Proof Of Stake (POS)?.

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The attached image below shows that some people think that we shouldn’t expect Ethereum 2.0 until 2023 while others were making fun of it by saying “2500 years” or the next decades according to responses to a recent survey post.

Ethereum 2.0 - When Is Ethereum Moving To Proof Of Stake (POS)? » Bulliscoming (4)
Ethereum 2.0 - When Is Ethereum Moving To Proof Of Stake (POS)? » Bulliscoming (5)
(Video) End of Ethereum 2.0 | Ethereum Merge coming | Vishal techzone

However, the answer depends on the definition of moving that you like, and we will understand when we should be expecting the shift as this article continue — but first, let’s understand what Ethereum 2.0 is!

Ethereum 2.0 is a new version of the Ethereum blockchain, which will be launched in several stages. In the first stage, Ethereum will move from POW to POS consensus algorithm. The main advantage of POS over POW is energy efficiency.

Ethereum 2.0 is a proposed upgrade to the Ethereum network. It aims to deliver major improvements to scalability, security, and decentralization. If the upgrade is successful, Ethereum will be able to compete with some of the largest payment networks in the world.

Ethereum 2.0 encompasses some different components such as Sharding, Casper, etc. Let’s focus on Proof of Stake.

Sharding is a proposed improvement to the current Ethereum protocol to increase network capacity and reduce waits during transactions.

According to BlockGeeks, Casper is the implementation of the Proof-of-Stake consensus algorithm used in Ethereum 2.0.

The Ethereum 2.0 roadmap is probably the most highly anticipated upgrade in the crypto ecosystem. Some might even say it’s a make-or-break point for ETH.

Ethereum 2.0 promises to solve the current issues and usher in a new era of smart contracts and dApps. It will be a complete overhaul of the current Ethereum blockchain, which means that some changes will be made gradually while others will happen overnight.

Let’s take a look at what’s in store for Ethereum 2.0 to have a better thought of when the new development should be completed.

Read: Bitcoin Lightning Wallet- Best Bitcoin Lightning Wallet To Use

Ethereum 2.0 Development Phases

  • Ethereum 2.0 Development Phase One

The first part of Ethereum 2.0 development will be launching and testing the Proof-of-Stake (POS) algorithm in test networks, while users and miners continue to work on the current Ethereum network (1.0).

  • Ethereum 2.0 Development Phase Two

In the second phase, Ethereum 1.0 and 2.0 will run in parallel, and users of the 1.0 network will be able to migrate their Ether (ETH) to 2.0 without restrictions or risks.

At this stage, it is expected that miners who have switched to Ethereum 2.0 will receive an additional reward for mining blocks for both networks simultaneously – for example, +5% for 1.0 and +5% for 2.0 per block mined.

  • Ethereum 2.0 Development Phase Three

The third phase will be a complete transition from 1.0 to 2.0 – all users and miners will switch to the new Ethereum network based on POS as soon as it becomes stable enough and has proven its scalability and reliability in a real environment over time.

(Video) Ethereum 2.0 Explained & Release Date - I Will Retire from Staking ETH | The Merge

According to the aforementioned development phases, Ethereum is expected to move to POS (Proof Of Stake) as soon as possible as the first and second development mentioned above has been passed according to a recent report.

Also read: Purchasa Token – Is PCA Token The Next 100× Gem?

Conclusion

One of the most important things to understand about Ethereum is that it is much more than just a cryptocurrency. It is a platform that allows developers to build applications on blockchain technology – which has posed a need for more energy-efficient for validating the blockchain network

The next generation of the world’s leading decentralized platform is around the corner.

However, some people believe that Polygon is Ethereum 2.0 — which is false, because Polygon blockchain is similar to other layers 2 blockchains (what makes it different is that it’s built upon Ethereum blockchain and retains the security of the Ethereum blockchain).

Let me get my fact straight, if the Polygon chain should be considered the Ethereum 2.0, what about other Layer 2 chains e.g Arbitrum, Optimism chain, etc. that possesses a scaling solution and also retains Ethereum chain security? – thus, Polygon cannot be considered the Ethereum 2.0 we have been expecting.

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Ethereum 2.0 - When Is Ethereum Moving To Proof Of Stake (POS)? » Bulliscoming (6)

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FAQs

When ETH Change to PoS? ›

Ethereum is all set to transition to PoS by the third week of September, but most of the promised scalability features will only be available after 2023.

Will Ethereum move to proof-of-stake? ›

The Ethereum network has been on a years-long path to switch its energy-hungry proof-of-work blockchain to a more efficient proof-of-stake system, and now its developers are suggesting a date to make the switch.

When Ethereum proof-of-stake date? ›

The Ethereum “merge,” which will switch the network from the intensive proof-of-work consensus mechanism to proof-of-stake, is expected to occur in mid-September. Developers at the leading altcoin suggested last month that the merge could happen as early as Sept. 19.

Will Ethereum 2.0 Be PoS? ›

ETH 2.0, now known as the 'consensus layer', will see the world's second-largest cryptocurrency move from the energy-hungry proof-of-work (PoW) consensus mechanism to the leaner, greener proof-of-stake (PoS) system.

What is disadvantage of proof-of-stake? ›

One of the biggest criticisms of PoS is that it is less secure than PoW. Because PoS does not require miners to expend energy in order to participate in the consensus process, it is possible for individuals with malicious intent to take control of the network by acquiring a large number of stake tokens.

Why do I need 32 Ethereum? ›

To become a full validator on Ethereum 2.0, ETH holders must stake 32 ETH by depositing the funds into the official deposit contract that has been developed by the Ethereum Foundation. ETH holders who wish to stake do not need to stake during Phase 0: they can join the network as a validator whenever they wish.

How much ETH do you need to stake? ›

To become a validator on Ethereum, users must invest 32 ETH.

Can you still mine Ethereum after PoS? ›

The Ethereum Merge

However, after Ethereum moves to proof-of-stake, GPU miners will no longer be able to mine Ethereum. With the price decline, the increase in energy costs, and the merge date drawing closer, the hashrate of the Ethereum network has dropped dramatically.

Is Ethereum using PoS or PoW? ›

Ethereum, like Bitcoin, currently uses a consensus protocol called Proof-of-work (PoW).

How long does it take to get proof-of-stake? ›

Ethereum Countdown: 76 Days Until Ethereum Becomes a Proof of Stake Blockchain. Ethereum (ETH-USD) is forecast to complete the Kiln Testnet Merge (a fork event) on Jun. 28, which is 76 days from now. This is when the new Proof of Stake (PoS) system for transaction validations starts.

What happens to my ETH after the merge? ›

After The Merge, Ethereum's blocks will be produced only through the Beacon Chain leveraging a proof of stake model. Ethereum's proof of work model will be shelved permanently. The Beacon Chain will be actively coordinating all the block validating activity, randomly selecting validators for participation.

Does ETH2 turn into ETH? ›

When you stake your ETH, it converts to ETH2 on Coinbase. The price of ETH2 is identical to ETH. Once the upgrade to the Ethereum network is complete, both ETH and ETH2 will merge into one token.

Is Solana proof-of-stake? ›

Designed as a decentralized protocol, Solana incorporates an innovative Proof-of-History (PoH) timing mechanism that is implemented prior to, and facilitates, its Proof-of-Stake (PoS) protocol structure.

Is PoS better than PoW? ›

While PoW mechanisms require miners to solve cryptographic puzzles, PoS mechanisms require validators to simply hold and stake tokens. Proof-of-stake (POS) is seen as less risky in terms of the potential for an attack on the network, as it structures compensation in a way that makes an attack less advantageous.

Can Bitcoin become proof of stake? ›

Will bitcoin ever use proof-of-stake? For bitcoin to use proof-of-stake, 51% of the community would have to agree on the change. Since this community includes bitcoin miners whose profit derives from proof-of-work, it is very unlikely that bitcoin will ever use proof-of stake.

Can Bitcoin upgrade to proof of stake? ›

Bitcoin's Code Is Immutable And Can Withstand Attempts To Make It Proof Of Stake. Attacks to make Bitcoin change its issuance mechanism to proof of stake are futile. History has shown that this type of attack will not work. Attacks to make Bitcoin change its issuance mechanism to proof of stake are futile.

Which is more profitable proof of work or proof of stake? ›

While proof of work is the most well-known blockchain consensus model, alternative consensus models like proof of stake might be more efficient since they can increase security, reduce energy use, and allow networks to more effectively scale.

Where is the best place to stake Ethereum? ›

Binance is the biggest digital currency exchange in terms of the trading volume. It is a top choice for investors when it comes to crypto trading platforms. The Binance staking platform for proof-of-stake coins such as Ethereum 2.0 appeared in December 2020. The exchange also supports DeFi staking.

How long is staked ETH locked? ›

StETh holders won't be able to redeem their tokens for ether until six to 12 months after an event known as the “merge,” which will complete Ethereum's transition from proof of work to proof of stake.

How much money can you make staking Ethereum? ›

Investors can make as much as 10.1% annualized yields by staking Ether tokens. The primary drawback to staking is the restricted ability to sell in a downturn. Staking should be a great way to earn passive income, though, as long as the future for Ethereum is bright.

Can you sell staked Ethereum? ›

The new token, which represents ETH staked through Coinbase, will let users sell, spend and use their staked ETH while earning rewards. cbETH can be sold or sent off-platform, as the underlying asset that represents ETH2 continues to be locked up in the deposit contract, said Coinbase.

How long is ETH staked for? ›

Newly staked ETH will undergo a bonding period of up to 20 days (often less than a couple of hours, depending on network conditions) before it will start earning ETH2 rewards.

How many Ethereum are left? ›

Ethereum, however, has an infinite supply. In January 2021, there were 113.5 million tokens in circulation. As of April 2022, there are roughly 120 million. There are some predictions that after shifting the Ethereum process from PoW to the PoS, the supply of Ethereum may be reduced.

Is Ethereum mining dead? ›

According to a report by Bloomberg this morning, the cryptocurrency mining industry is dying at a rapid pace. With many of the world's major cryptocurrencies, such as Bitcoin and Ethereum, crashing, mining is no longer a sustainable form of income for many people.

Is staking profitable? ›

The primary benefit of staking is that you earn more crypto, and interest rates can be very generous. In some cases, you can earn more than 10% or 20% per year. It's potentially a very profitable way to invest your money. And, the only thing you need is crypto that uses the proof-of-stake model.

How will Ethereum 2.0 affect price? ›

Ethereum 2.0 Merge coming soon - INSANE price impact - YouTube

How does proof-of-stake make money? ›

How does proof of stake work? The proof-of-stake model allows owners of a cryptocurrency to stake coins and create their own validator nodes. Staking is when you pledge your coins to be used for verifying transactions. Your coins are locked up while you stake them, but you can unstake them if you want to trade them.

Is Cardano proof-of-stake? ›

Cardano is a decentralized proof-of-stake (PoS) blockchain designed to be a more efficient alternative to proof-of-work (PoW) networks. Scalability, interoperability, sustainability, growing costs, energy use, and slow transaction times are critical tenets behind Cardano's development.

How high can Ethereum go? ›

The Finder panel predicts on average that ETH would be worth more than $14,000 by 2030, though another forecast is less bullish. Ben Ritchie, managing director of Digital Capital Management, says ETH could reach as high as $15,000 in 2030 because of the upcoming upgrades, such as lower gas fees and scalability.

Will ETH 2.0 reduce gas fees? ›

Ethereum Merge will not reduce gas fees, DeFi researcher says. The global crypto market cap is $1.04 trillion with a 24-hour volume of $67.77 billion.

What is the price prediction for Ethereum? ›

Technical analysis compiled by CoinCodex showed that short-term sentiment on the ETH price was neutral as of 25 August 2022. However, the website's Ethereum crypto price prediction was bullish, projecting the future Ethereum price to rise by 19.41% and reach $ 2,042.24 by 30 August.

Is staking crypto worth it? ›

Yes. Staking crypto can be extremely profitable, and it is an excellent way to earn passive income for long-term believers in crypto who are indifferent to price swings.

What's the next big crypto? ›

Waves. WAVES-USD is the final possible candidate to be the next big crypto on the market. Essentially, Waves is a blockchain platform for building Dapps and smart contracts as well as launching custom crypto tokens. The platform uses a variation of the PoS consensus mechanism called leased proof-of-stake (LPoS).

Is Solana better than Eth? ›

Solana is the fastest blockchain, but Ethereum has a much higher trading volume and is more used in the crypto market. Investors may be more interested in the growth prospects of the two networks. As the decentralized world expands, one may assume that both of these networks will grow in the future.

What crypto is faster than Solana? ›

Bitgert team has built the fastest blockchain in the industry, which is faster than the Solana blockchain. Solana has had the fastest blockchain in the industry for the longest time with its 65k TPS. But Bitgert has launched BRC20 blockchain with a throughput of 100k TPS.

Will proof-of-work go away? ›

Over the next year, proof-of-work will be phased out in favour of Proof-of-stake (PoS). The transition to proof-of-stake will also phase out mining from Ethereum.

Will ETH 2.0 reduce gas fees? ›

Ethereum Merge will not reduce gas fees, DeFi researcher says. The global crypto market cap is $1.04 trillion with a 24-hour volume of $67.77 billion.

What happens to my ETH after the merge? ›

After The Merge, Ethereum's blocks will be produced only through the Beacon Chain leveraging a proof of stake model. Ethereum's proof of work model will be shelved permanently. The Beacon Chain will be actively coordinating all the block validating activity, randomly selecting validators for participation.

How will Ethereum 2.0 affect price? ›

Ethereum 2.0 Merge coming soon - INSANE price impact - YouTube

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