Ethereum co-founder Vitalik Buterin said the blockchain’s upcoming merger with the proof-of-stake consensus will not negatively affect miners minting new tokens on the blockchain’s predecessor, Ethereum Classic.
Speaking in a webinar on Saturday, Buterin noted that he does not expect any negative effects on the blockchain since most of the Ethereum community supports the merger. Merging with proof of work eliminates the need for Ethereum miners who currently secure the network using expensive mining equipment and earn ETH in the process, for whom the merger could result in significant financial losses.
As a result, many miners could revert to Ethereum’s original blockchain, Ethereum Classic, which still uses proof of work. The roots of Ethereum Classic go back to a philosophical divide in the Ethereum community following the 2016 hack of The DAO, a decentralized autonomous organization whose operating rules were encoded in code contained in a smart contract.
The DAO was hacked to the tune of $3.6 million and split the Ethereum community. One faction voted to transfer funds from the DAO smart contract to another smart contract. Others, on the other hand, chose to keep the existing smart contract. The first group chose to move funds from the smart contract to a smart contract on a new chain or “fork”, while others chose to preserve the old blockchain, known as Ethereum Classic, which uses still a proof-of-work consensus mechanism. .
Users shouldn’t notice any difference, says Beiko
There are concerns that miners switching back to Ethereum Classic could disrupt the merger. Ethereum suffered a series of denial of service attacks after the 2016 fork, and crypto exchanges should proceed with caution during the merger. Ideally, users shouldn’t notice anything different, says developer Tim Beiko.
Buterin added that Ethereum Classic has a strong community and a robust product for proof-of-work die-hards. The community strongly promotes proof-of-work values. Nevertheless, the market could still split.
Buterin hopes people won’t lose money
The decline in Ethereum mining revenue caused by the prolonged decline in Ethereum prices has already put miners under financial pressure. Institutional bitcoin miners had to sell bitcoin to bolster balance sheet liquidity. Others take out loans against bitcoin mining machines, known as application-specific integrated circuits.
Buterin said he hoped people wouldn’t lose money anyway.
In May 2022, he said that, barring any problems, the merger could take place in August. Problems could mean the merger is pushed back to September or October 2022.
At press time, Ethereum was hovering around the $1718 mark.
What do you think of this subject? Write to us and tell us!
All information contained on our website is published in good faith and for general information purposes only. Any action the reader takes on the information found on our website is strictly at their own risk.