To solve this issue, Ethereum developers are looking for alternative mechanisms that the network can adopt to give it a competitive edge over other upcoming and scalable networks such as Solana and Polygon.
One of the ways that Ethereum seeks to achieve this is by transitioning to a proof-of-stake (PoS) consensus. The PoS consensus uses less energy compared to the proof-of-work consensus (PoW). Moreover, PoS works by allocating mining power based on the number of coins held by a miner.
PoS as Proposed by Ethereum
Once Ethereum adopts a PoS consensus, miners will be required to stake ether to become a validator on the network. Just like in the PoW consensus, validators will be responsible for ordering transactions and creating new blocks. Validators will be activated upon receipt of enough stake.
Ethereum has proposed that validators on the network will need to own a minimum of 32 ETH. Those who qualify will be selected randomly to create blocks and confirm blocks they have not created.
The stake owned will also be used to promote the good behavior of validators on the network. For instance, a validator will lose part of their stake for mistakes such as failure to validate and deliberate collusion.
Disadvantages of PoS
PoS is praised because of its many benefits, such as improving speed and efficiency. However, it also has some disadvantages.
Block creators of the coin will have much more power if few validators are on the network. Few validators will allow them to validate most, if not all, of the transactions. However, a validator can quickly lose their position if they go offline for a long time, in which case another validator will randomly be picked to fill their position.
The second weakness of the PoS consensus is that it mainly favors wealthy users. For instance, Ethereum has proposed that a validator will need 32 ETH, equivalent to around $66,500 at today’s prices. In addition, the more ETH you stake, the more votes you have. However, Ethereum will solve this through the randomized selection of block creators, where the influence of wealthy holders will be diminished.
Despite these weaknesses of the PoS consensus, its benefits outweigh the cons, and it still holds many advantages compared to PoW. It will be one of the significant breakthroughs of the Ethereum blockchain.
