Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
(Expected) Life After the Merge
Protocol | Tomio Geron | Sep 6, 2022
Image: Unsplash/DrawKit Illustrations
Ethereum is expecting to make its biggest change ever this month, transforming how transactions are processed and secured on the blockchain. But the Merge, as the switch from proof of work to proof of stake is known, is more than just technical. It’s expected to bring major changes to the security and economics of the network, and ultimately its structure of control.
Significantly Reduce energy consumption
The most visible and popular aspect of the upgrade is reducing Ethereum’s environmental impact, with the Merge cutting energy consumption by about 99%. But proof of stake, advocates believe, will also make the network more resistant to a hostile takeover or government interference.
Increased security
One major change will be increased security, which should bring more confidence in Ethereum, developers say.
See: Post-Merge Will Ether Be Closer to a Security?
The move to proof of stake for verifying transactions will make it much harder for anyone to make a 51% attack, which is a way hostile parties try to take over a network and steal tokens by cornering its processing power, according to Ben Edgington, ConsenSys product lead for Teku and a core developer involved in the Merge.
More resistant to government pressure
Proof of stake, however, doesn’t require hardware, just holdings of ether. While there’s a minimum contribution of 32 ether, worth about $50,000 at present, to become a validator, individuals can contribute ether to a pool to join up. That could open up the network to a much wider range of people to operate it, which in turn would make it more resistant to government pressure in specific locales. The goal is to make Ethereum more “censorship”-resistant — meaning less subject to the actions of particular governments.
“If you've got a lot of operators in a single jurisdiction, then you become vulnerable to regulatory capture,” Edgington said. “And so by having the network so that no one jurisdiction is dominant or can single-handedly take down the network, then everything is much more robust.”
See: Post-Merge, PoW Die-Hards Plan to Fork Their Own Ethereum Chains
Impact to upstart blockchains
The Merge shouldn’t hurt newer Layer 1 blockchains much in the short term, said Urvashi Barooah, a crypto investor at Redpoint Ventures. “Many of these alt Layer 1s have vibrant communities and DApp ecosystems which won't move away overnight,” she said. However, if Ethereum rolls out further improvements to speed and cost next year, it could increase Ethereum’s sway over other networks, Barooah said.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
 |  |  |
Support NCFA by Following us on Twitter!Follow @NCFACanada  |
Related Posts
Do All Companies Provide Paystubs?- What You Should Know Before Playing Punto Banco
- According to CBDCTracker, these Central Banks have Launched a CBDC or Pilot Initiative as of Today
- How to Value a Fintech Startup
- FCA Consultation: Payment Services (Contactless Payments) and Electronic Money – Our Approach
- Tech Spark launches crowdfunding campaign to support tech summer camp for underrepresented youth
Leave a Reply