Ethereum Is Ready For Migration To Proof-Of-Stake

The second largest cryptocurrency based on market capitalization, Ethereum, is preparing for a significant update – transition to Proof-of-Stake (PoS) blockchain protocol. Ethereum developers expect the code to be finalized next month and to be implemented with a hard fork.

The first stage of Ethereum’s new blockchain is scheduled for June 30th. Developers state that the work on the new code is “on track,” but further simplification is needed.

The update will also affect all ERC-20 tokens currently running on Ethereum’s mainnet. The founder of Ethereum, Vitalik Buterin, stated at the recent ETHCapetown conference that the dubbed Ethereum 2.0 update contains “two big core components.”

The first innovation is called Casper – the actual Proof-of-Stake algorithm, which will “replace mining with a more effective solution.” The second improvement is the so-called “sharding” – enabling only a part of the computers in the network to process transaction data, which will help scalability.

“With the second update, we are anticipating 1,000-fold scalability. But such an improvement will come after we launch Phaze Zero of our Ethereum 2.0 update”, Buterin added.

In its core the update resembles a new method of block validation – it eliminates “miners” and places “validators” who stake their tokens and vote for different block events.

The “cash-back” for validators will be determined by the quantity of the staked tokens and the overall number of staked tokens.

Shortly after the news, Ethereum’s price spiked up from $160 to $169; trading volumes are also increasing. Overall, the crypto sector sees “green” from investors and retail clients. Bitcoin is up by 6,7% to trade at $5,730.81. Litecoin also gained 7 percent to trade at $79.13.

As of press time, the total market capitalization sits at $186,5 billion, with $57 billion in trading volume. Bitcoin managed to stiffen its dominance over the other cryptocurrencies – 55% of the global market capitalization is due to Bitcoin.