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The Ethereum blockchain, the most important behind bitcoin, is about to undergo the beginnings of a major update.

Nicknamed the “fusion”, Ethereum is moving to a more energy-efficient method of validating transactions that take place on the platform, known as proof-of-stake.

The upgrade is similar to how the transition from using dial-up modems to fiber optics has allowed the Internet to be used for a wider variety of things, such as video, online storage, and music streaming, Greg King, founder and CEO of Osprey Funds, tells CNBC Make It.

Here is an overview of what the merger means and how it will affect crypto investors.

What is Proof of Stake?

The merger will move the blockchain from a proof-of-work (PoW) model to a proof-of-stake (PoS) model. Both are algorithms used to allow users to add new cryptocurrency transactions and keep track of them on a blockchain network.

The current proof-of-work model requires huge amounts of energy to power computers that race to solve complex mathematical equations to validate transactions.

Proof of Stake, on the other hand, requires users to have a “stake” in the blockchain, as the name suggests.

This means that Ethereum users will have to make quite a large investment to authenticate transactions. However, this model should be much less energy-intensive.

How will this affect investors and potential investors?

What impact will this have on the environment?

Will the merger make Ethereum less vulnerable to hackers?

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