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world’s second-largest cryptocurrency market

Bytomasian

Sep 12, 2022

The upgrade of Ethereum, the world’s second-largest cryptocurrency market capitalization, is just around the corner. As it is the largest update in blockchain history, cryptocurrency investors are also paying attention to Ethereum.

According to the blockchain industry on the 12th, Ethereum founder Vitalik Buterin said on Twitter on the 6th, “The rest is expected to take place around the 13th and 15th.” Related industries predict that the update will be implemented within the 20th, even considering the error.

Merge is a super-large update in which Ethereum, which has a market capitalization of nearly 300 trillion won, converts its “consensus algorithm” from Proof of Work (PoW) to Proof of Equity (PoS). Cryptocurrency users (nodes) have been writing a kind of “transaction book” called Blockchain through agreement, which is to efficiently change the agreement method.

Proof of work, which was an existing algorithm, refers to the so-called ‘mining’. This means that if you bring what you worked on, you will pay for it. If you continue to generate blockchain, that is, books, using the computational power of the computer, you get cryptocurrency in return. However, this method has been blamed for environmental damage by consuming huge amounts of electricity. In addition, as more and more people try to obtain Ethereum through proof of work, the problem of overload occurred, which increased mining difficulty and time, and eventually slowed down the speed at which transactions were processed.



On the other hand, the equity certification method grants block creation rights in proportion to the amount of equity holdings, not computer computation. In other words, “We will allow you to participate in an agreement to write a book as much as your cryptocurrency stake.” Just by changing the agreement method in this way, power consumption is reduced by 99% compared to the previous one, and overload problems can be solved.

In addition, the supply of Ethereum will drop sharply. Because mining becomes impossible. Unlike Bitcoin, which has a total of 21 million issues, Ethereum has no limit. As a result, a total of 4.9 million Ethereum was newly issued a year in Ethereum based on proof of work, but the supply from the proof of equity will shrink to 580,000 Ethereum, which is about 12% of the previous one. In addition, Buterin attended Korea Blockchain Week 2022 on the 8th of last month and mentioned that “the fee will be reduced by 25 cents.”

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