Which implies the transition from the Proof-of-Work protocol to Proof-of-Stake. This will ensure a reduction in electricity costs by avoiding round-the-clock mining, and at the same time increase the security of transactions against the background of an ever-growing number of users.
The success of the “move” from one algorithm to another was reported in the official account of the network, as well as in the personal account of the co-founder of the project Vitalik Buterin.
Market experts believe that the migration to another algorithm has become the most significant event in the history of the second largest cryptocurrency by capitalization Ethereum.
The essence of the transition is that now the authenticity of transactions will not be “approved” by miners, but only by validators, that is, holders of “steaks” (blocked shares in cryptocurrency).
With the Proof-of-Work protocol, users (miners) are online 24/7, and their devices constantly “approve” transactions. Most modern cryptocurrency projects work on this protocol, including Bitcoin, Binance Coin, etc.
With the Proof-of-Stake protocol, transactions are verified only by authorized network participants (the largest coin holders).
The transition from PoW to PoS is beneficial both to the crypto network itself and to depositors:
reduces power consumption by dozens of times,
it avoids problems associated with the growth of the number of users,
increases the speed of the network,
provides a higher level of protection,
contributes to the efficiency and scalability of the network.
Infrastructure remains a bottleneck in the crypto industry.
The Ethereum merger is a bold attempt to lay the foundation for the scalability and sustainability of Web3,” He Yi, co—founder of Binance and head of Binance Labs, comments on the transition.
“It also provides the security needed to achieve mass adoption. Although there is still a lot of work to be done to ensure scaling, the merger will allow Ethereum to make significant progress. The Proof-of-Stake consensus mechanism is an excellent foundation on which developers can rely”
After the news about the Ethereum network update, many crypto exchanges announced that they would charge new tokens to the owners of ETH and WETH (in case they appear after the “Merger”) in a ratio of 1:1.
Binance representatives also made such a statement: the platform will introduce trading with zero commission for the ETH /BUSD pair, abandoning its usual 0.1% commission. There are no hidden costs here, they assure.
The explanation for this is simple: they understand that there will be an influx of crypto users, both beginners and veterans interested in the ecosystem and its native asset.
“As a company focused primarily on users, we want to provide everyone with the opportunity to buy and sell ETH with minimal barriers to entry. Ethereum, like Bitcoin, is another cornerstone of the Web 3 ecosystem,” Binance reported.