Ethereum plans to replace mining with proof of stake
Ethereum plans to replace mining with a proof of stake model called Casper by the end of the year, according to Bloomberg.
In order for Ethereum to realize the potential that companies like IBM, Microsoft and JPMorgan see in its blockchain, it must achieve wide adoption.
Vlad Zamfir, who has worked on Casper since 2014, said eliminating mining will make Ethereum more secure, usable and scalable.
As Ethereum expands, the computations that miners must do to validate transactions gets harder. This has created potential for transaction bottlenecks while creating what many consider a wasteful use of energy among miners.
The proof of stake model, by contrast, requires users to put up collateral to collect fees for validating transactions. The more collateral, the greater the reward for verifying transactions.
Proof of stake would remove the need for miners to approve software changes, making it easier to make improvements.
Hyperledger, a blockchain consortium that includes JPMorgan, IBM and American Express, could adopt Ethereum’s proof of stake model if it’s successful, said Brian Behlendorf, the consortium’s executive director.