Ethereum’s (ETH) new Serenity update, which is said to activate the network’s transition from a PoW (Proof-of-Work) consensus protocol to a PoS (Proof-of-Stake) consensus model, has generated plenty of hype and anticipation in 2018.
Apart from tackling the issue of scalability, the new chain will drastically reduce the cost of running a staking node on Ethereum 2.0. This information was unveiled via a tweet on Nov. 20.
The Protocol Update is Set to Lower the Cost of Staking
In a rapidly declining digital asset market, news relating to technical updates to a number of the most popular networks out there has the tendency to enter the spotlight. We can recall on Oct. 31, that Vitalik Buterin, the co-founder of Ethereum (ETH), had a lot to say about the Ethereum 2.0 upgrade as well as the basic principle behind the new network. He did this during the Devcon4 conference held in Prague.
Ethereum (ETH) Price Today – ETH / USD
The Ethereum (ETH) co-founder spoke about the Serenity project, the PoS (Proof of Stake) protocol that the network will be using for the new Ethereum 2.0 upgrade. In Buterin’s speech, only little technical details were provided about the protocol itself, although the crypto mogul did explain what the upgrade involved and the problems it was designed to tackle.
While most of the digital asset industry was focused on comparing this new protocol to the traditional PoW (Proof-of-Work) consensus protocol or dwelling on the declining value of major digital assets, one Twitter user revealed one of the main pros of the new consensus to the network.
The Twitter user named David Hoffman who works with Bunker Capital as a Blockchain researcher passed this advantage via a Tweet on Nov 19. Hoffman who is also the host of the PoV crypto podcast revealed via his Tweet that the upgrade would reduce the cost of staking significantly. There was a stir among Ether proponents who wait for the launch.
How Will Ethereum’s New Protocol Benefit the Platform?
According to Hoffman, when Ethereum (ETH) changes from the PoW to PoS protocol, 32 ETH tokens will be needed to stake. Because staking will replace mining once the new consensus protocol launches, stakers will have the ability to receive block rewards and reduced transaction fees. These rewards will enable stakers to receive a sort of passive income. Users will be able to earn 5 percent of the total token they staked yearly.
Decrease in the Price of Ethereum (ETH) Has Positively Impacted This Initiative
A decrease in the price of Ether has been seen during the second phase of November. This movement has impacted this initiative in a positive way because the loss of value indicates that the 32 ETH tokens will be worth less than $5,000. Hence, the lower the price, the more stakers could join the network, building up its efficiency.
Buterin, also spoke about the issues Ethereum (ETH) had to deal with when developing the Serenity project during his Devcon4 speech. He said the new protocol would be much more scalable than the initial PoW concept.
Ethereum (ETH), currently ranks number 3 among the top digital assets by market capitalization. It is down by 3.56 percent in the last 24 hours with a market cap of $13.77 billion and a $2.79 billion 24 hour volume.