Ethereum's long-awaited move to Proof of Stake is set to finally advance this summer. Speaking at the blockchain and Web3 Permissionless event, Ethereum lead developer Preston Van Loon said that The Merge code is ready for deployment. Final testing is currently underway for an August release of The Merge for Ethereum 2.0.
The transition from Proof of Work to Proof of Stake will mark a turning point for Ethereum mining. Simply put, Proof of Stake allows you to mine Ethereum by purchasing ETH and using it as collateral to ensure the legitimacy of transactions on the blockchain. Currently, they are using Proof of Work, where mining rigs with GPUs and CPUs solve complex equations to validate transactions.
In August, Ethereum will go to 2.0
Originally planned for 2019, the Ethereum network's Merge event marks the point at which the blockchain's security and consensus mechanism shifts from the current Proof of Work model to a Proof of Stake design. It is expected to require significantly less hardware and energy, rendering outdated criticisms that it is harmful to the environment. This transition will mark the end of GPU mining on the Ethereum network . Its token value, currently around $2.000, has made it one of the most profitable cryptocurrencies to mine without the need for specialized equipment like Intel's Blockscale ASICs.
The shift to Proof-of-Stake (PoS) should also allow Ethereum to claim greater energy efficiency compared to other Proof-of-Work (PoW) blockchains like Bitcoin. This would shield it from regulations in various countries should cryptocurrencies be targeted based on the claim that their mining algorithms are highly polluting.
Furthermore, this is expected to lower the price premium on GPUs , the component that best mines cryptocurrencies with these algorithms. Ethereum has been criticized for forcing a price premium that prevents home users from accessing modern GPUs. This could also affect graphics cards dedicated to mining, known as CMPs, as they will no longer be necessary to obtain ETH. This reliance on GPUs for cryptocurrency mining has caused problems for NVIDIA. It was recently fined for failing to provide investors with details about GPU sales to miners, a market considered volatile.
The merge will most likely reduce the issuance of new ETH tokens by approximately 90%. The rate at which new Ethereum tokens enter circulation will be slowed. This will create greater scarcity and is expected to drive up the price per token. All of this is expected to happen in August, barring any unforeseen issues. However, the Ethereum 2.0 merge has been delayed for years, so further delays are not unlikely.
Source: Tom's Hardware
