It’s been nearly three years since Ethereum’s creator, Vitalik Buterin, first proposed that the network move from a proof-of-work (PoW) consensus algorithm to a proof-of-stake (PoS) algorithm.
Today, Ethereum is the largest decentralized application (dapp) platform in the world and the second largest blockchain by market capitalization. And although Ethereum has been incredibly successful so far, there’s still a long way to go before it can be considered a truly decentralized platform.
One of the main reasons for this is that Ethereum is still using a PoW consensus algorithm, which means that it is vulnerable to centralization because it requires miners to put up a significant amount of money in order to participate in the network.
This has led to the formation of large mining pools that have a significant amount of power over the network. In fact, just four mining pools control more than 60% of all blocks on the Ethereum network.
The good news is that Ethereum is finally making the switch to PoS with its upcoming upgrade, Ethereum 2.0.
This upgrade will not only make Ethereum more decentralized, but it will also make it much more scalable and energy efficient. .
So far, everything is on track for Ethereum 2.0 to launch in 2020.
However, there are still some challenges that need to be addressed before it can be fully implemented.
The first challenge is getting enough people to stake their ETH on the network. In order for PoS to work, there needs to be a minimum of 524,288 ETH staked, which is currently about $120 million worth of ETH.
Ethereum Foundation researcher Justin Drake said that they are “confident” they will be able to get enough ETH staked on the network before launch. But even if they don’t, he said that they could still launch with a lower amount and then gradually increase it over time.
The second challenge is ensuring that all of the nodes on the network are running correctly. This is important because if even one node goes down, it could jeopardize the entire network.
To solve this problem, Ethereum 2.0 will use something called “sharding” which essentially breaks up the network into smaller pieces so that each node only has to process a small portion of transactions.
This will make the network much more resilient and allow it to process thousands of transactions per second.
Conclusion: Overall, it seems like Ethereum is on track to successfully switch over to PoS with its upcoming upgrade, Ethereum 2. While there are still some challenges that need to be addressed, such as getting enough people to stake their ETH on the network and ensuring that all nodes are running correctly, these seem like problems that can be solved relatively easily compared to other challenges faced by blockchain projects.