In September 2022, Ethereum is scheduled to launch the upgrade of ETH 2.0 to Merge. Some exchanges will give full support to the upgrade and potential hard fork of ETH. If successful, Merge can create two parallel blockchains after upgrade. So what is Ethereum PoW (ETHW) Coin?
What is ETHW Coin ?
Ethereum, like Bitcoin, currently uses a consensus protocol called Proof-of-work (PoW). This allows the nodes of the Ethereum network to agree on the state of all information recorded on the Ethereum blockchain and prevents certain kinds of economic attacks.
Over the next year, proof-of-work will be phased out in favour of Proof-of-stake (PoS). The transition to proof-of-stake will also phase out mining from Ethereum.
What is Proof Of Work ?
Proof-of-work is the mechanism that allows the decentralized Ethereum network to come to consensus, or agree on things like account balances and the order of transactions. This prevents users from “double spending” their coins and ensures that the Ethereum chain is tremendously difficult to attack or manipulate.
How Does Ethereum Proof Of Work ?
Ethereum transactions are processed into blocks. Each block has a:
- block difficulty – for example: 3,324,092,183,262,715
- mixHash – for example:
0x44bca881b07a6a09f83b130798072441705d9a665c5ac8bdf2f39a3cdf3bee29 - nonce – for example:
0xd3ee432b4fb3d26b - This block data is directly related to proof-of-work.
Pros Cons
| Pros | Cons |
|---|---|
| Proof-of-work is neutral. You don’t need ETH to get started and block rewards allow you to go from 0ETH to a positive balance. With proof-of-stake you need ETH to start with. | Proof-of-work uses up so much energy that it’s bad for the environment. |
| Proof-of-work is a tried and tested consensus mechanism that has kept Bitcoin and Ethereum secure and decentralized for many years. | If you want to mine, you need such specialized equipment that it’s a big investment to start. |
| Compared to proof-of-stake it’s relatively easy to implement. | Due to increasing computation needed, mining pools could potentially dominate the mining game, leading to centralization and security risks |
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