The new consensus of Ethereum: what is the result of the reduction of miners’ reward

Ethereum is about to switch to a new consensus algorithm. Another news is that the miners’ reward will be reduced from 3 ETH to 2 ETH. How will this affect the course of the cryptocurrency?

PlasmaPay
PlasmaPay
Sep 7, 2018 · 2 min read

It’s possible to create decentralized applications on on the Ethereum development ecosystem. This approach of the creators of cryptology is confirmed by attention from Microsoft. In this software platform, based on the blockchain, is hidden the main difference between Ethereum and other cryptocurrencies.

What should be noted is that the Ethereum consensus algorithm has no repetitions among other cryptocurrencies. The network began to function with the classic Proof-of-Work gradually moving to Proof-of-Stake through a series of hardforks. That’s why it happens:

  • beginning with the classic algorithm helped the currency to start quickly and close the Proof-of-Stake bugs;
  • Proof-of-Stake does not require energy-consuming calculations, and this will save on electricity in the mining centers;
  • an attack of 51% becomes inexpedient: when you try to buy a large amount of coins, the market reacts with a sharp rise in price. And there’s no point in attacking the network, half of which is your own money.

Reducing the reward of the miners from 3 to 2 ETH

In order to understand what will be th result of the reduction of the miners’ reward, one should keep in mind two hardforks.

Metropolis is the the Ethereum network hardfork, which is divided into two stages: Byzantium and Constantinople. The introduction of Byzantium was made in October 2017, the second stage is planned for the fall of 2018. So, the reward for the miners’ block will soon drop to 2 ETH. So, the number of existing ETH-miners can dramatically change.

The transition from Proof-of-Work to Proof-of-Stake will lead to a number of changes that may seem unobvious without careful consideration. The network will certainly benefit from the transition: huge energy costs for maintenance of the mining centers will not be needed. Therefore, the ETH course can once again turn around and go up.

PlasmaPay

Payment platform on blockchain. Plasmapay.com

PlasmaPay

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PlasmaPay

First crypto/fiat payment platform. Made by @ilyamk

PlasmaPay

PlasmaPay

Payment platform on blockchain. Plasmapay.com

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