On September 15th, 2022, Ethereum officially switched from a Proof-of-Work (PoW) consensus to a Proof-of-Stake (PoS) consensus in a move that has been coined “the Merge.” This, according to Ethereum, was in an effort to reduce the use of energy-intensive technology in favor of what they consider to be a more sustainable ecosystem going forward. While the PoS model is said to minimize network power usage by up to 99%, it is not without its risks.
While a PoW system uses miners to solve blockchain algorithms in order to validate transactions, the PoS model puts control into the hands of those who hold the highest crypto stakes. This puts into question the ability of the blockchain to remain decentralized if the decision-making powers are monopolized.
In addition to this, many fear that it can expose the network to scammers, making it a less secure ecosystem than PoW. The worst part of this merge is that it has essentially put Ethereum blockchain miners out of business.
The question that remains is: what options do miners and investors who favor a PoW system have now?
Pulsar Chain is a blockchain based on the Ethereum ecosystem, which offers an alternative PoW model that takes its greatest advantages – such as enhanced network security and keeping the blockchain decentralized – while changing the way mining is done to make it more sustainable, in line with renewable energy trends and policies.
This is achieved through the introduction of Renewable Energy Certificates (RECs) and incentivizing miners to use renewable energy sources when powering mining hardware, among other green initiatives.
The PoW consensus creates a blockchain network that is entirely decentralized – there is no central body or authority in control of the network or validating transactions. The ecosystem preserves the integrity of PoW miners, enabling the process to be decentralized, thus, democratic.
The PoS consensus flips this on its head by giving decision-making authority and the ability to validate transactions to those who stake the most crypto, allowing individuals to buy a substantial stake in controlling the network. This calls into question just how decentralized a PoS blockchain can really be. In addition, with 32ETH being the minimum amount to become a solo staker, the barriers to entry are too high for many traders or miners to pivot.
PoW is considered to be the most secure consensus algorithm available today for a number of reasons, which include:
1) More resistant to Sybil attacks.
In a proof-of-work system, it is exceedingly difficult for an attacker to control a significant percentage of the network's hash power. This makes it more difficult for the attacker to mount a successful Sybil attack.
2) More resistant to 51% attacks.
In a PoW system, an attacker would need to control the majority of a network's hash power in order to mount a successful 51% attack (also called a double spending attack). This is much harder to do than in a PoS system, where an attacker could simply buy up most of the coins and then use those coins to vote on which blocks to include in the chain.
It is no secret that mining equipment draws massive energy, which is why PoS has been touted as being an eco-friendlier approach. With this in mind, Pulsar Chain aims to make crypto more sustainable and greener by incentivizing miners to power mining equipment through renewable energy resources, with double block rewards and carbon credits.
Pulsar is committed to performing regular audits of mining equipment to verify sustainable infrastructure. In addition to this, to reduce E-waste, Pulsar will partner with specialist recycling companies to safely dispose of mining equipment.
Miners are also encouraged to practice demand response by switching off mining equipment during peak energy consumption hours.
Not only does PoW make buying and selling crypto safer for traders, but preserving the PoW system will aid miners in sustaining their livelihoods. Miners invest substantial amounts in equipment that is rendered useless if the PoW system is deprecated, creating not only a devastating economic loss but a huge amount in E-waste too.
The Pulsar ecosystem is compatible with the Ethereum Virtual Machine, giving developers hesitant about PoS the ability to create Ethereum DApps.
Pulsar is the answer to keeping blockchain technology as decentralized as possible by preserving the PoW consensus while creating a more environmentally friendly way of mining.
Those hesitant about adopting a PoS consensus can continue to trade, mine and develop DApps on a stable, sustainable and entirely decentralized blockchain.
Care about keeping blockchain decentralized? Learn more about what the Pulsar PoW ecosystem offers by visiting our website.
Disclaimer: Readers should keep in mind that the information contained in this article does not constitute investment advice. The ideas and strategies presented should not be used to make any investment before assessing your financial situation and consulting a financial professional.