Ethereum's Move From Proof-of-Work Essential for the Network, Crypto Exec Says




  • In Business
  • 2022-08-10 20:25:32Z
  • By CoinDesk
 

The Ethereum blockchain's transition away from its proof-of-work (PoW) mechanism is necessary for the network to expand, according to Brian Norton, chief operations officer of MyEtherWallet, an app where investors can store their ether, which is Ethereum's native token.

Norton said on CoinDesk TV's "First Mover" show on Tuesday that Ethereum's ability to sustain its growth with the PoW consensus mechanism is "not going to be tenable" and said the method isn't energy efficient.

"In order for Ethereum to move with the ecosystem and continue to be the leader and remain true to its principles of being open and permissionless, a transition out of proof-of-work is absolutely going to be essential," Norton said.

Norton's comments come as Ethereum prepares to switch to a proof-of-stake (PoS) method of maintaining its network and validating transactions with a software update known as the Merge.

According to developers, the proof-of-stake mechanism is more efficient and cheaper than proof-of-work.

Norton says the update may be pushed "further down the road," perhaps until next year if the Merge doesn't go as planned. It is supposed to go live next month.

As the Merge approaches, Norton said institutional adoption will likely increase, especially if users begin to better understand what the change will mean for the blockchain.

Institutional investors now appear to be bullish about the Merge, piling into ETH-based funds, Norton said, but if the Merge takes longer than expected, users and investors could grow "restless" and pull out.

Norton said the Merge will "provide users a sharp contrast" between PoW and PoS, and could even affect bitcoin (BTC).

"Now you have another potentially deflationary asset in the crypto space that is more energy efficient and has more use cases," Norton said of ether.

The Bitcoin network, on the other hand, has been designed for the exchange of its native token, which could resonate more with users who view the token as a store of value.

Norton said that "most users are not going to see a thing" following the Merge but that the price of ether will likely surge as it has done this summer.

Read more: Ethereum Is Getting Cheaper to Use, Even Before the Merge

COMMENTS

More Related News

An excellent week for Severn Trent Plc
An excellent week for Severn Trent Plc's (LON:SVT) institutional owners who own 85% as one-year returns inch higher

To get a sense of who is truly in control of Severn Trent Plc ( LON:SVT ), it is important to understand the ownership...

State or government account for 42% of Telkom SA SOC Limited
State or government account for 42% of Telkom SA SOC Limited's (JSE:TKG) ownership, while institutions account for 30%

A look at the shareholders of Telkom SA SOC Limited ( JSE:TKG ) can tell us which group is most powerful. And the group...

With 57% institutional ownership, TMX Group Limited (TSE:X) is a favorite amongst the big guns
With 57% institutional ownership, TMX Group Limited (TSE:X) is a favorite amongst the big guns

Every investor in TMX Group Limited ( TSE:X ) should be aware of the most powerful shareholder groups. The group...

Individual investors account for 54% of ISDN Holdings Limited
Individual investors account for 54% of ISDN Holdings Limited's (SGX:I07) ownership, while insiders account for 36%

A look at the shareholders of ISDN Holdings Limited ( SGX:I07 ) can tell us which group is most powerful. And the group...

Venture Corporation Limited
Venture Corporation Limited's (SGX:V03) top owners are individual investors with 47% stake, while44% is held by institutions

To get a sense of who is truly in control of Venture Corporation Limited ( SGX:V03 ), it is important to understand the...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Business