This is a very exciting day for Ethereum fans. Because I’ve written so much on this subject, most recently, SoulBOUND, I can’t let this day go by without acknowledging it.
If you are one of those fans you will know that the Merge—transitioning from proof-of-work (POW) to proof-of-stake (POS) happened today. Bitcoin mining requires a huge amount of energy, something I talked about in Bitcoin: The Dirty Business of Clean Energy. Ethereum’s Merge promises to alleviate that problem (too big a topic to discuss here).
Key differences between POW and POS:
With proof-of-stake (POS), cryptocurrency owners validate block transactions based on the number of coins a validator stakes.
Proof-of-stake (POS) was created as an alternative to Proof-of-work (POW), the original consensus mechanism used to validate a blockchain and add new blocks.
While POW mechanisms require miners to solve cryptographic puzzles, POS mechanisms require validators to simply hold and stake tokens.
Proof-of-stake (POS) is seen as less risky in terms of the potential for an attack on the network, as it structures compensation in a way that makes an attack less advantageous.
The next block writer on the blockchain is selected at random, with higher odds being assigned to nodes with larger stake positions.
There is a deeper level to all of this.
In my essay SoulBOUND, I wrote about Vitalik Buterin and his Soulbound Tokens (SBT). I delved into the importance placed on legitimacy/proof of identity, and the fascinating connection between Ethereum and the game Soulbound, known as “the first ever tabletop roleplaying game set in the Warhammer Age of Sigmar, one of the most exciting fantasy settings ever created.” The actual term Soulbound refers to a “blood contract between a Shaman and their Shikigami that permits them to match Soul Wavelengths.”
Will the Merge really make a difference for the better? I guess we’ll see. But since it seems like, more and more, we are being sucked into other people’s fantasies as pawns on their gameboard, I remain skeptical.