Ethereum’s Shanghai Update Opens a Rift in Crypto
upstart writes:
At 19:27 Eastern time on April 12, the Ethereum blockchain, home to the world's second-most-popular cryptocurrency, ether, will finally sever its links to crypto mining. Within the Ethereum bubble, a sense of anticipation is building; some are planning "viewing parties" for the occasion. Codenamed "Shanghai," the update to Ethereum caps off a process, after "The Merge," which fundamentally changes the way transactions are verified and the network secured.
Under the old system, proof-of-work (PoW) mining, the right to process a batch of transactions and earn a crypto reward is determined by a race to solve a mathematical puzzle. The greater the computing power miners throw at the problem, the greater their chance of winning the race. Under Ethereum's new proof-of-stake (PoS) system, there is no race and there are no miners; instead, the winner is determined by raffle. The greater the amount of ether somebody locks up on the network-or stakes-the greater the chance they hold a prize-winning ticket.
By demonstrating that a large-scale blockchain can shift from one system to another, Shanghai will reignite a debate over whether the practice of mining that still supports bitcoin, the most widely traded cryptocurrency, is viable and sustainable. [...]
"The energy consumption problem is Bitcoin's achilles heel," says de Vries. "It's a simple fact that as the price of bitcoin gets higher, the energy consumption problem gets worse. The more money miners make, the more they will typically spend on resources: hardware and electricity.
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