Ethereum had successful dress rehearsal to move to proof-of-stake
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Ethereum just completed its first big dress rehearsal for a long-awaited makeover that will be its most significant overhaul since the digital currency was launched nearly a decade ago.
Cryptocurrencies such as ethereum and bitcoin are often criticized for the process of mining to generate new coins. Both currently use a so-called proof-of-work mining model, involving complex math equations that massive numbers of machines race to solve.
Ethereum has been working to shift from the energy-intensive proof-of-work method for securing the network to a proof-of-stake model, which requires users to leverage their existing cache of ether as a means to verify transactions and mint new tokens. This requires far less power than mining and will translate to faster transactions.
The transition has been repeatedly pushed back for the last several years because of major flaws in the implementations.
Developers told CNBC that the latest test run on Wednesday was very smooth, an important marker as the blockchain for the second-largest cryptocurrency gears up for its landmark move.
Here’s what happened. Ethereum’s longest-lived test network (testnet, for short) simulated a process identical to what the main network (or mainnet) will execute this fall. Testnets allow developers to try out new things before they’re rolled out on the main blockchain, giving them time to make necessary tweaks.
Wednesday’s exercise showed that the proof-of-stake validation process substantially reduces the energy necessary for verifying a block of transactions, and also proved that the merger process works.
“There was no crazy bug that happened,” said Auston Bunsen, co-founder of QuikNode, which provides blockchain infrastructure to developers and companies. “Everything went as smooth as it could be.”
Tim Beiko, the coordinator for ethereum’s protocol developers, agreed and added that the network is now stable. However, he noted that the test hit “some minor known issues,” and developers “will be spending the next few days triaging them before discussing next steps on this Friday’s AllCoreDevs call.”
The price of ether, the token native to the ethereum blockchain, has lost about half its value this year and is trading at just over $1,800.
Working out the bugs
Since December 2020, the ethereum community has been testing out the proof-of-stake workflow on a chain called beacon. The beacon chain runs alongside the existing proof-of-work chain and already has human validators crunching new blocks.
Beacon solves the problems that have arisen from prior efforts to make the switch, according to Beiko.
“We knew that there would be a lot of technical work to address things like the increased centralization that we see in other proof-of-stake systems,” Beiko told CNBC. “We’ve achieved that with the beacon chain.”
Beiko tells CNBC the original proposal required validators to have 1,500 ether, a stake now worth around $2.7 million, in order to use the system. To…
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