Soon the second capitalization cryptocurrency Ethereum waiting for the change of the algorithm of consensus and reducing the size of the rewards miners with 2 ETH 3 to ETH. How will this affect the price movements of the cryptocurrency in a special article for journal ForkLog told the creators of the mining-pool Uleypool.com.
According to the founder pool for mining Uleypool.com Andrei Kurchenko, Ethereum continues to strengthen its position thanks to its unique ecosystem development on the basis of which it is possible to create decentralized applications. This innovative approach, the creators of Ethereum has already proven its efficiency in practice and is clearly demonstrated in the attention from such giants of industry like Microsoft. In this ecosystem software platform based on the blockchain lies the main difference between Ethereum from other cryptocurrencies.
Recall that Ethereum has a unique model of the algorithm for finding the consensus among all cryptocurrencies. It combined two ways, with special, original way: the network started functioning with a classic Proof-of-Work, through a series hardforce gradually moving to Proof-of-Stake. This model of mining has a number of advantages:
- beginning with the classical algorithm gave fuel for a quick start currency and time to close bugs then another crude Proof-of-Stake;
- the transition to Proof-of-Stake will give the opportunity to seriously save on electricity in mining centres, as the major energy-consuming computation, this model does not require;
- the so-called “arms race” existing in the traditional mining, it no longer makes sense, although the risk remains associated with the accumulation of large amounts of coins in one hand;
- attack 51% becomes impractical because, firstly, when trying to buy a large amount of coins the market reacts to a sharp increase in prices, and secondly, it makes no sense to attack the network, half of which are your own money.
Metropolis in Ethereum: two hard forks and reducing the awards of the miners from 3 to 2 ETH
Metropolis is another hardwork Ethereum, which is divided into two stages: Byzantium and Constantinople. The first phase of the road map has already passed: the introduction of Byzantium was produced in October 2017, the second phase is scheduled for autumn 2018. So, the reward for miners mined block will soon fall to 2 ETH.
As noted by Andrey Kurchenko, Metropolis will be one of the starting point of the launch of a new algorithm of Ethereum, and by the end of this autumn, the number of existing ETH miners can change dramatically. The result of these changes will be the beginning of the network functioning on principles of the Protocol hybrid PoS/PoW, also called Casper FFG — just after the completion of phase Constantinople.
Forecast market movements on the background of these news
Decrease awards up to 3 ETH at the stage of Byzantium has led to analyst expectations for a drop in emissions from 14.75% to 8%, which in turn, naturally leads to the appreciation of Ethereum. Experts believe that there are no reasons for a sudden change in this trend there and the situation is likely to happen again on the news about the successful completion of phase Constantinople.
The transition from Proof-of-Work to Proof-of-Stake will lead to a number of changes that may not be immediately obvious without careful consideration. The network will benefit from switching, because the huge energy cost of maintaining the mining centres are needed. As noted by Kurchenko, for the same reason, the rate of ETH could once again turn around and go up.
Source
