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No more mining on video cards: Ethereum switched to Proof-of-Stake

Today, September 15, a fundamental event for the world of cryptocurrencies took place – the largest update called Merge was released, which officially transferred Ethereum to the Proof-of-Stake model instead of Proof-of-Work. It is worth noting that the developers have been preparing this update of the cryptocurrency system since 2016, each time postponing the event for another year. But now the market is about to change as Ethereum, the second most important cryptocurrency in the world, moves to full decentralization using minimal electricity costs. And if earlier Ethereum was criticized for an impressive blow to the ecology of the planet, now everything looks much more attractive.

Perhaps it is worth explaining the difference between Proof-of-Work and Proof-of-Stake. When using the Proof-of-Work model, users were rewarded in ETH for the work they did, and this reward was directly dependent on the processing power of the system. Accordingly, the miners used farms from video cards, making a decent profit, but also spending insane amounts of electricity. With the Proof-of-Stake model, it is no longer necessary to mine virtual coins on video cards – now cryptocurrency holders receive a reward for staking their assets. This means that the more currency a user has, the more coins he will receive as a reward for processing transactions.

And given that it is no longer necessary to mine anything in this format in the usual sense of the word, global energy consumption for currency production should decrease by 99.95%. Yes, that’s right, now only 0.05% of energy consumption is needed to process transactions and other mechanisms before switching to the Proof-of-Stake model. Of course, this is just a preliminary assessment by the Ethereum Foundation, but without mining on video cards, the demand for electricity should really drop a lot. I would also like to note that the major update had almost no effect on the cryptocurrency rate – at the time of publication, the cost of Ether was $ 1,600, it lost about 0.05% of the rate per day.

At the same time, for gamers, this news is actually great – now that there is no point in mining on video cards, the secondary market will be filled with video cards at very low prices, and new models will probably not be sold at such insane prices as a year earlier.

Source: Trash Box

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