Singapore Fintech Festival 2022: Ethereum’s Vitalik Buterin on the success of The Merge
The switch from Proof of Work to Proof of Stake was slated as the event of the century for the cryptocurrency community and in just over a month since The Merge, has already resulted in massive transformations to the digital currency landscape in terms of increased scalability and reduced impact on the environment. As Buterin explained, “Proof of Work relies on a bunch of miners that are running computations on specialised hardware that costs millions of dollars 24/7.”
Proof of Work had numerous criticisms. Buterin continued: “It’s not as secure as it could be. It has issues with centralised. It requires a significant amount of issuance to keep operating and it has this pretty significant environmental issue because of all the electricity consumed and all of the hardware that is rapidly consumed and destroyed by this process of running hardware to do computations 24/7.”
After a two-year long testing period, Buterin explained that Proof of Stake is more secure because of the increased number of validators that secure the Ethereum network as part of an ongoing agreement across existing blocks and when new blocks are created.
These validators in their thousands are creating what is referred to as “added stations” and place “confirmation messages” on each block in parallel. “A block has a very high degree of security, even only for a few seconds after it gets published. We can actually see this in the data,” Buterin said.
Further, estimates have suggested that post-Merge, Ethereum consumes about 99.95% less electricity than it did pre-Merge. The consumption that was previously equitable to a small country’s electricity usage “disappeared” overnight.
Financial exclusion is also a cause for concern. Buterin mentioned that “the
Read more on finextra.com
