Solana Vs Ethereum: Could SOL Surpass ETH In User Adoption?

Solana Vs Ethereum: Could SOL Surpass ETH In User Adoption?

Solana is showing signs of potentially surpassing Ethereum in terms of consumer decentralized applications (DApps), as noted by Solana Foundation’s former head of growth. Despite current market challenges, Solana’s unique features could lead to increased developer activity and user adoption.

Matty Taylor, co-founder of Colosseum and previously part of the Solana Foundation, shared that he believes the Solana blockchain is going to become more popular than Ethereum, especially for regular users. 

He said that Solana has been doing better than Ethereum in attracting user-friendly apps that fit with the modern web, thanks to its ability to handle transactions quickly and efficiently.

Currently, according to DappRadar, Ethereum has about 4,520 decentralized applications (Dapps), which is considerably more than the ones on Solana (240). 

But even so, Solana has kept its nickname over the years, as it is often mentioned as a potential “Ethereum-killer.” This is because Solana can process transactions faster and more efficiently than Ethereum.

The collapse of FTX and the subsequent market downturn were major challenges for Solana, but according to Matty Taylor, these events actually brought more developers to the platform, even as the value of Solana’s SOL token dropped. 

Taylor pointed out that every major blockchain network, including Bitcoin with its Mt Gox incident and the 2020 market downturn, has faced tough times. He believes that Solana has emerged from these challenges stronger and with a growing number of developers.

Despite these advancements, Ethereum still leads significantly in the crypto space. 

As of March 2024, according to DefiLlama data, the total value locked (TVL) on Ethereum is $50.5 billion, more than 11 times Solana’s TVL of $4.34 billion.

Solana Vs Ethereum: Could SOL Surpass ETH In User Adoption?

Source: DefiLlama 

Solana Vs Ethereum: Could SOL Surpass ETH In User Adoption?

Source: DefiLlama 

Additionally, Solana faced technical issues when its blockchain stopped producing blocks for over five hours on February 6, forcing a network restart by its validators. This was not the first time; Solana has experienced several notable disruptions since January 2022.

Matty Taylor explained that while network problems are usually bad for any system, blockchains trying to expand their capabilities will naturally face some challenges. He mentioned that it’s better for these issues to occur now rather than later, especially before large, critical funds like pensions begin to rely on blockchain technology. He admitted that while it’s not ideal, these challenges are part of the innovation process.

Ethereum vs Solana dApps

There is no doubt that Solana is becoming a serious competitor to the already established Ethereum blockchain. 

According to DappRadar, the top 10 Dapps are divided between Ethereum and Solana. Three of these are native to Solana, six are Ethereum-based, and one (Magic Eden NFT marketplace) supports both blockchains. 

However, it’s worth pointing out that the UAW (Unique Active Wallets) interacting with these apps seems to be increasing on the Solana-based Dapps. 

Raydium, the Solana-based DEX, has taken the lead with over 1.15 million unique addresses in the last 30 days. This is almost double that of the most popular DEX in the crypto space, Uniswap. However, the top from DappRadar counts Uniswap V3, V2 and the NFT aggregator as separate Dapps, but there’s no way of knowing if those aren’t the same addresses on both Uniswap V3 and V2. 

Solana Vs Ethereum: Could SOL Surpass ETH In User Adoption?

According to CoinMarketCap, Solana (SOL) registered a price surge of over 78% during the last month, reaching a trading price of about $185 at the end of March 2024. 

Solana Vs Ethereum: Could SOL Surpass ETH In User Adoption?

This sharp increase, together with its latest tech developments, played a pivotal role in last month’s TVL increase for its top protocols. Here’s a screenshot from DefiLlama of the top protocols on Solana, sorted by their TVL (total value locked). 

Solana Vs Ethereum: Could SOL Surpass ETH In User Adoption?

Stablecoin dominance

Stablecoins are another way to measure how relevant a blockchain really is. Investors and day traders will often use stables, such as USDT and USDC to safeguard their trading profits from the market’s volatility. 

While Ethereum still maintains its sovereignty, being responsible for over 52% of all stablecoin transactions, Solana ranks as the 4th blockchain for stablecoin trading, with a 1.86% dominance of the total market share.  

Solana Vs Ethereum: Could SOL Surpass ETH In User Adoption?

Source: DefiLlama, Total Stablecoins Market Cap Dominance

Here is a breakdown for each of the top blockchains for trading stables. 

Solana is gradually growing in volume and market capitalization, experiencing more than a 4% increase over the last week. It appears that Solana is steadily outpacing Ethereum. If this trend continues, it will not be a matter of if but rather a question of when.

Solana Vs Ethereum: Could SOL Surpass ETH In User Adoption?
What Is The Ethereum Dencun Upgrade, And Why Is It Important?

What Is The Ethereum Dencun Upgrade, And Why Is It Important?

The Ethereum Dencun upgrade, combining Deneb and Cancun updates, introduces significant changes to enhance scalability and reduce fees. This upgrade, crucial for Ethereum’s future growth, facilitates cheaper transaction storage off-chain. 

What is Ethereum Cancun-Deneb (Dencun) upgrade?

Dencun combines two updates called Deneb and Cancun into one big change for Ethereum, touching both the part of Ethereum that reaches agreements (consensus layer) and the part that handles transactions (execution layer). 

The Dencun upgrade also brings a feature called Proto-Danksharding through EIP-4844, aiming to lower the costs for layer 2 (L2) storage solutions. It introduces a new kind of temporary data storage called “blobs,” which helps in making storage cheaper for rollup providers. 

Proto-danksharding is an early step towards full danksharding. It allows layer-2 solutions on Ethereum to keep large transaction data off the main network, similar to using a temporary storage space. This helps reduce costs for users of layer-2 solutions by keeping the main Ethereum network less cluttered and reserved for crucial transactions.

These blobs stay available on the network for about 18 days, or 4096 epochs, after which they are removed. However, even after removal, the validity of the data can still be checked with certain proofs.

This is a major system update in blockchain, and it started at a specific time in Ethereum’s history, rolling out completely in 15 minutes. This update aims to cut down fees for certain transactions and enable Ethereum to handle more activity.

Deneb focuses on improving the agreement part of Ethereum, making sure everyone on the network agrees on what’s happening. 

Cancun upgrades how transactions are done, making them smoother and more efficient. 

This addition is expected to significantly lower rollup costs, control the size of the blockchain, and accommodate more users while keeping the network secure and decentralized.

This big change comes after another important update last year, which let people take their Ethereum out if they had put it into the network before.

What will happen after the Ethereum Dencun upgrade?

Lower fees from rollups

This feature started on March 13, 2024, at 1:55 PM UTC, from epoch 269568. 

Major rollup providers like Arbitrum and Optimism have announced they will start using the new blob feature right after the upgrade. 

However, the exact time when each rollup will start showing lower fees might differ because each provider needs to update their systems to use the new blob space.

Off-chain transactions to keep the network costs low

The Dencun upgrade makes Ethereum better by allowing it to handle more users and transactions without raising costs too much. It also keeps the network spread out and not controlled by just a few.

Ethereum is focusing on improving “layer 2 rollups.” These are systems that help handle more users safely.

Rollups work by doing transactions separately and then sending a summary or proof back to the main network. This process costs money, which was high before because every network user had to keep the information forever.

The Dencun upgrade introduces Proto-Danksharding, making it cheaper to store these summaries. Now, they only need to be kept for about 18 days, reducing costs. Since rollups need about 7 days to handle withdrawals, the new 18-day limit is more than enough, keeping everything secure without needing more computer storage.

Impact all Ethereum consensus and validator clients

The Proto-Danksharding update (EIP-4844) requires changes to both the systems that carry out transactions and the ones that help agree on the network’s state. 

All the main programs used by Ethereum have been updated to reflect this change. 

People running these programs need to make sure they’re using the latest version to stay connected with Ethereum after the update. 

Remember, this info can get outdated, so always look for the latest updates. Also, the software used by validators, who help keep Ethereum secure, has been updated for this new change.

Layer 2 (L2) transactions can be stored in 2 ways

Transactions on Ethereum’s Layer 2 can now be stored in two ways

  1. in new, cheaper temporary blob space or 
  2. in the older, more costly permanent smart contract calldata. 

Blob space saves money by offering short-term storage, enough for all needed security checks. The permanent calldata, though more secure for long-term, costs more.

The choice between using blob space or calldata is usually up to the rollup providers, who decide based on how much blob space is available. 

If lots of people want to use blob space, they might have to use calldata to make sure transactions go through quickly.

Even though users might technically pick which storage they prefer, rollup providers typically make this decision to keep things simpler and costs lower. For more details on how this works, you should look at the information given by the rollup providers.

Enhanced security with EIP-4788 and EIP-6780

The Dencun upgrade wasn’t mainly about security, but it did bring in some improvements to make Ethereum safer.

Part of the update, EIP-4788, helps the parts of Ethereum that check transactions and the parts that carry out transactions talk to each other better. This could make it harder for attackers to find and exploit weak spots.

Another change, EIP-6780, is about altering the way smart contracts can end themselves through the “SELFDESTRUCT” function. By tweaking how this works, it’s harder for bad actors to misuse this function, which could lead to better overall security for Ethereum smart contracts.

Lower costs on Layer-2 solutions

The Dencun update has introduced a new method for Ethereum’s Layer-2 scaling solutions that lowers the cost of transactions. 

These Layer-2 networks group many transactions together to save money before sending them to the main Ethereum network. 

The key feature of Dencun, called proto-danksharding and introduced in EIP-4844, reduces Layer-2 costs by allowing these networks to store certain transaction information outside the main blockchain.

Will the 4844 update lower the cost of gas on Layer 1 (L1)?

Not really. 

The update brings in a new way to charge for something called blob space, used mainly by rollup providers. Moving rollup data to blobs might lower fees on L1 a bit, but the main goal is to cut costs on Layer 2 (L2). Any decrease in L1 fees would be a small, indirect result.

The lessening of L1 gas costs depends on how much the rollup providers use the new blob data. But since L1 is used for lots of other things too, its costs might stay competitive. 

If rollups start using blob space, they will use less L1 gas, which could help reduce L1 gas prices for a while. 

However, blob space has its limits; if it gets too full, rollups will need to use the old, more expensive storage, which could make gas prices go up again for both L1 and L2.

How do you get old blob data?

Regular Ethereum nodes keep the latest network information, but they can throw away old blob data after about 18 days. Before getting rid of it, Ethereum makes sure everyone who might need it has a chance to:

  • Grab and save the data if they want.
  • Finish any dispute periods for rollups.
  • Complete the transactions for rollups.

People might want old blob data for different reasons, and there are a few ways to get it:

  • The Graph uses a network of node operators paid in cryptocurrency to keep this data.
  • BitTorrent lets volunteers store and share the data.
  • Ethereum’s portal network is working to let people access all Ethereum data through a network similar to BitTorrent.
  • Individuals can also keep their own copies of any data they find important.
  • Rollup services might keep the data to make their services better.
  • Block explorers use special nodes to collect and keep all this information, making it easy to look up past data on the web.

When getting old data back, you just need one reliable source to check it against the current network state.

How does this upgrade fit into the larger plan for Ethereum?

Proto-Danksharding is a preparatory step towards fully adopting Danksharding. 

Danksharding aims to spread out the storage of transaction data among different network participants, so no single one has to store everything. 

This method will allow more data to be included in each block, helping Ethereum grow to support more users and transactions.

Such growth is key for Ethereum to serve billions of people affordably and run more complex applications while keeping the network spread out and not controlled by just a few. 

Without these updates, the equipment needed to run the network would become too costly, possibly leaving only a few large players in charge, which would conflict with Ethereum’s goal of being decentralized.

Ethereum’s Centralization Dilemma: A Double-Edged Sword of Staking and Node Operations

Ethereum’s Centralization Dilemma: A Double-Edged Sword of Staking and Node Operations

While Ethereum staking is on the rise, it brings with it the challenge of increased centralization. Even Ethereum co-founder Vitalik Buterin acknowledges this as a core issue, suggesting that a comprehensive solution may be decades away.

The growth in Ethereum staking has surged since the Merge update. 

But this has led to two issues: the network becoming more centralized and people earning less from staking. 

The team at JPMorgan, headed by top executive Nikolaos Panigirtzoglou, cautioned investors about these rising concerns related to Ethereum’s increasing centralization.

The leading five easy-staying services—Lido, Coinbase, Figment, Binance, and Kraken—hold more than half of all staked Ethereum.

According to Dune Analytics, over 31% of all ETH staked belong to the Lido pool. 

While people in the crypto world have viewed Lido as a better option than centralized services like Coinbase or Binance, the reality is different. 

Ethereum's Centralization Dilemma
Source: Dune analytics 

Even decentralized platforms like Lido still have a lot of control concentrated in a few hands. For example, one Lido node operator alone manages over 7,000 sets of validators, holding 230,000 Ether.

This concentration of power occurs because Lido’s decision-making is controlled by a small number of wallet addresses in their decentralized organization, known as a DAO. 

While there was a general market proposal to limit each staking service to no more than 22%, Lido’s DAO voted against it in June 2023. In general, a DAO is a self-governing platform, but in this case, its decision to not limit its Ether staking is making the entire Ethereum ecosystem more centralized and, thus, more vulnerable. 

Having too much control in one place poses a risk to the Ethereum network. A small group of major stakeholders or node operators could become a weak point in the system, or even collaborate to gain unfair advantages.

In addition to concerns about centralization, the Ethereum network has also seen staking yields go down since the big updates like the Merge and Shanghai.

The average block rewards have dropped from 4.3% to 3.5%, and overall staking yields have gone from 7.3% to around 5.5%.

It’s not just JPMorgan ringing the alarm bells about Ethereum’s growing centralization after the Merge, which was launched on September 15, 2022. This update is viewed as a stumbling block to Ethereum’s goal of being fully decentralized, and it has also led to reduced earnings from staking.

Even Ethereum’s co-founder, Vitalik Buterin, acknowledges the issue. In September 2023, he admitted that tackling the problem of node centralization in Ethereum is a big challenge, and finding an ideal solution could take up to two more decades.

Simplify node operations on Ethereum

Ethereum co-founder Vitalik Buterin says that making it simpler and less expensive to operate nodes is crucial for addressing the Ethereum network’s centralization issue. 

Right now, most of the nearly 6,000 active Ethereum nodes are hosted by centralized services. The top service used it Amazon Web Services, posing a vulnerability for the network.

While speaking at Korea Blockchain Week, Buterin identified six critical challenges to overcome to ensure Ethereum stays decentralized over time. 

One major aspect is making it technically easier for people to operate nodes. “Statelessness is a key technology to make this possible,” he added.

As of now, running a node requires hundreds of gigabytes of data storage. 

With stateless clients, however, you could operate a node without needing almost any storage space at all. This statelessness means eliminating the need for centralized services to verify network activities. 

According to the Ethereum Foundation, true decentralization can only happen when running an Ethereum node becomes accessible and affordable.

Buterin emphasized that statelessness is a significant part of Ethereum’s future plans. Major progress towards this goal is expected in upcoming phases called “The Verge” and “The Purge.”

He mentioned that the long-term vision is to have fully verified Ethereum nodes that are so streamlined you could literally run one on your phone.

Lido Defies 22% Self-Limit Rule Amidst Mixed Reactions

Lido Defies 22% Self-Limit Rule Amidst Mixed Reactions

While multiple Ethereum staking services are pledging to limit their market share to 22%, Lido Finance takes a different path, sparking debates on centralisation and community values.

The top five companies that offer ether staking pools for individuals have stated that they won’t control more than 22% of all ETH currently staked. 

This is a way to make sure that no single company has too much power over the Ethereum network, keeping it open and fair for everyone. 

Companies like Rocket Pool, StakeWise, Stader Labs, and Diva Staking are either already following this rule or planning to do so, says Superphiz, a key Ethereum developer. 

Puffer Finance, another such company, has also said they’ll stick to this limit.

Lido doesn’t obey the 22% of ether staked limit

Why 22%? 

Superphiz explains that to make any big changes to the Ethereum network, 66% of the participants have to agree. 

By setting a limit of 22%, it ensures that at least four big companies would have to work together to push through any major updates. This makes the network safer and more secure.

When talking about blockchain transactions,  the finality of a transaction is the moment when transactions are locked in place and can’t be changed. 

Superphiz, a leading Ethereum developer, brought up an important question last May: 

Would a company that helps people stake Ethereum be willing to put the network’s well-being over its own profits?

Interestingly, Lido Finance, the biggest company of this kind, decided not to follow the 22% self-limit rule. Almost all of their members (99.81%, to be exact) voted against it back in June. 

Superphiz mentioned in a post at the end of August that Lido aims to control most of the deciding power in the Ethereum network.

To give you an idea of how big Lido is, they control 32.4% of all Ethereum that’s currently being staked. 

That’s a big deal, especially when you consider that the next largest, Coinbase, only has an 8.7% share, according to data from Dune Analytics.

Source: Dune Analytics

What’s the right thing to do?

Well, the Ethereum community has different opinions on that. 

One expert named Mippo commented at the end of August that the 22% self-limit rule isn’t really about staying true to Ethereum’s ideals, which are about open access and innovation for everyone. 

Mippo thinks that those advocating for the self-limit would probably not stick to it if they were in the dominant position like Lido Finance. In his view, everyone is just acting in their own best interest.

Another person argued that user-friendly services shouldn’t be criticised as greedy. 

On the flip side, some people are really concerned that a few big companies could end up controlling too much of the Ethereum network. They see Lido’s large market share as a problem, even calling it “selfish and disgusting.”

Why is Lido Finance the top staker on Ethereum?

Lido ticks all the boxes when it comes to staking services. 

They support multiple types of digital money and make it super easy for anyone to use their platform. 

Their fees are fair, and they even offer nice rewards if you refer people to their service. On top of that, they make a lot of different cryptocurrencies more available for trading and are backed by some big names in the decentralised finance world. 

What’s cool is that when you stake your digital tokens with Lido, you get back tokens that are tied to the value of what you staked. You can then use these for more ways to earn money in the DeFi world.

Lido has become a top pick for people looking to stake their digital assets thanks to some standout features. 

First off, staking is a breeze; you can earn daily rewards by simply staking your tokens, and there’s no minimum amount you need to start.

Want to make even more from your tokens? 

Lido allows you to use them for things like loans, yield farming, and other money-making activities. This can give your earnings a nice boost.

They also have their own digital token, called LDO, that you can trade on popular exchanges like SushiSwap, Uniswap, and many more.

When it comes to security, you can rest assured. Lido’s smart contracts have been thoroughly checked by reputable firms like Quantstamp and Sigma Prime.

Although Lido doesn’t offer its own wallet, you can still use popular ones like TrustWallet and MetaMask to manage your assets.

Ethereum’s Shapella Hard Fork Successfully Implemented

Ethereum’s Shapella Hard Fork Successfully Implemented

Following numerous postponements, Ethereum validators are now able to retrieve their staked Ether and associated rewards from the Ethereum mainnet. The Shapella hard fork has been successfully implemented on the Ethereum mainnet, enabling validators to withdraw their staked Ether from the Beacon Chain. 

The highly anticipated Shapella update on Ethereum has been launched, introducing the much-awaited new feature, the Ether unstaking. The Ethereum community has expressed various reactions to the latest update in the ecosystem. The term “Shapella” is a combination of “Shanghai” and “Capella,” referring to simultaneous upgrades. This hard fork marks a significant milestone in Ethereum’s development, generating excitement among community members for the network’s future.

The highly anticipated update occurred at 10:27 pm UTC on April 12, during epoch number 194,048. In the initial hour following the hard fork, Ethereum block explorer beaconchai.in reported that 12,859 Ether were released through 4,333 withdrawals.

Ether staking rewards are withdrawn

At present, approximately 44% of validators, equating to 248,043 out of 559,549 active validators, have the option to request a partial or complete withdrawal. 

Most of the current withdrawals range from 2.8 to 3.2 ETH, indicating that primarily staking rewards are being withdrawn at this time. Data from Rated Network Explorer reveals that just before the Shapella hard fork was implemented, 3,996 validators joined the exit queue.

Based on data from blockchain analytics company Nansen, crypto exchange Huobi possesses the most significant portion of withdrawable Ether at 30%. The decentralized autonomous organization PieDAO follows with a 17.7% share.

Ethereum's Shapella Hard Fork Successfully Implemented on Mainnet

Nansen data indicates that 284,622 Ether from 7,948 validators are awaiting complete withdrawal. The price of Ether experienced minimal fluctuations during the first hour after the hard fork, as forecasted in an April 11 report by blockchain intelligence platform Glassnode. In theory, the hard fork could unlock 18.1 million Ether on the Beacon Chain, which is equivalent to over $34.8 billion. 

However, the Ethereum Foundation has implemented several measures to prevent a sudden influx of ETH into the market. Glassnode’s report projected that less than 1% of the total amount would be released during the first week, and the 12,859 Ether unlocked within the first-hour accounts for a mere 0.07% of the total Ether staked on the Beacon Chain.

As for the market, the predictions are optimistic. The capacity of Ether to surpass resistance levels has led some analysts to predict a $3,000 price target in Q2 2023. Data from analytics provider Santiment reveals that whale accumulation remains robust, increasing by 0.5% in March.

This positive buying activity could support on-chain data indicating that Ether sell pressure following the Shanghai hard fork will be insignificant.

Ethereum Investment Proposal EIP-4895 facilitated the transfer of staked Ether from the Beacon Chain to the Ethereum Virtual Machine (EVM). This is known as the execution layer, thereby enabling withdrawals. This update on the Ethereum blockchain represents the most substantial upgrade since the Merge on September 15 and brings Ethereum one step closer to achieving a fully operational proof-of-stake system.

The community celebrates the Ethereum Shapella upgrade

During the Shapella watch party organized by the Ethereum Foundation team, Ethereum co-founder Vitalik Buterin expressed that the network is currently in a “really good place.” He said the most challenging and rapid aspects of the Ethereum protocol’s transition have essentially concluded. There are still substantial tasks to be accomplished, but they can proceed at a more relaxed pace.

In celebration of the new update, crypto singer Jonathan Mann performed a song at the Shapella watch party.

As some community members celebrated the event, others focused on the network’s future prospects. Ethereum community member Anthony Sassano highlighted the next significant feature, EIP-4844, which aims to improve the scalability of rollups on Ethereum.

The Shapella update is expected to attract more institutional investors to Ethereum. 

The Ethereum Merge Is Complete: From PoW to PoS

The Ethereum Merge Is Complete: From PoW to PoS

The upgrade from a proof-of-work (PoW) to a proof-of-stake (PoS) blockchain is now completed. What does this mean for the first programmable blockchain? 

On September 15, 2022, after years of development, Ethereum’s developers completed the Merge – the upgrade from a proof-of-work (PoW) to a proof-of-stake (PoS) blockchain. The PoS network is expected to power a more energy-efficient blockchain while reducing transaction fees and improving scalability. 

Potentially, the payoff could be huge. Ethereum should now use 99.9% less energy. According to one estimate, Ethereum’s energy consumption dropped from 77.77 TWh on September 14 to 0.01 TWh on September 16, 2022. 

The Ethereum Merge Is Complete: From PoW to PoS

The developers of Ethereum claim that the upgrade will bring the network, which houses many cryptocurrency tokens, to a more scalable and secure state. Ethereum’s TVL (Total Value Locked) is at about $30 billion, considering all its DeFi apps – DEXs, lending protocols, NFT marketplaces, and other apps.

The Ethereum Merge was completed at 7 a.m. UTC. However, the price of Ether (ETH) started to slowly decrease, dropping by 12% on the first day after the Merge. Ether’s price started a downtrend, and many investors are bearish.  

PoS Ethereum = no more ETH miners

In 2008, when Bitcoin was created, it introduced the concept of a decentralized ledger –  a single immutable record that computers all over the globe could access and trust without intermediaries.

In 2015, Ethereum was introduced. It expanded on the core concepts of Bitcoin’s blockchain by adding smart contracts. These smart contracts are bits of code that use the blockchain to record data onto its network and trigger automated transactions when certain pre-defined conditions are met. This innovation was key to decentralized financing (DeFi) and NFTs, which were the major catalysts for the recent crypto boom.

On Ethereum’s proof-of-work (PoW) network, crypto miners were responsible for verifying transactions and adding new blocks to the blockchain in exchange for rewards paid in ETH. These blockchain operations required miners to invest in expensive hardware equipment that was capable of solving the required cryptographic puzzles – hence the intensive energy consumption of the network. 

Ethereum miners were often organized in farms, which were actually huge buildings filled with mining equipment, similar to data centers, which were a huge strain on any energy network.  

PoS Ethereum

The new proof-of-stake system for Ethereum, which is a blockchain-based cryptocurrency, completely eliminates mining.

Miners are now replaced by validators. To become an Ethereum Validator, you must stake 32 ETH on the network. This means that maintaining Ethereum’s network security will not rely anymore on an energy-intensive computer network but the value of ETH stakes. It will require a similar level of electricity as any other computer software. 

Proof-of-stake is a system where the staked amount of ETH – and not the energy expended – determines who has control of the network. This makes attacks more costly and self-destructive, according to proof-of-stake boosters. Attackers can have their staked Ethereum slashed or reduced as punishment for trying to harm the network.

However, some are skeptical about the proof-of-stake security. There are no indications that Bitcoin, for example, will ever abandon the proof-of-work (PoW) consensus mechanism, as it is still seen as the more secure system. 

Now, Ethereum’s security relies on stakers

The upgrade to a PoS blockchain ends the network’s dependence on energy-intensive cryptocurrency mining.

The idea that Ethereum would eventually switch to proof of stake was clear from the beginning. However, the transition was complicated and risky. Many people doubted that it would ever happen.

The complexity of the update was exacerbated by the fact it was one of the most complex open-source software projects in history. It required coordination among dozens of teams as well as volunteers, researchers, and developers.

Tim Beiko, an Ethereum foundation developer, played a crucial role in the coordination of the update. He believed that more investors would become interested in crypto after this monumental milestone in the crypto universe. 

Vitalik Buterin, Ethereum’s creator, suggested that there’s still a long way ahead for the network: “This is the first step in Ethereum’s big journey towards being a very mature system, but there are still steps left to go.”