Will the Ethereum Merge Make Flux the “King of POW?” A Paradigm Shift In Blockchain Is Here.
The merge is a long-time planned upgrade to the Ethereum network that will see the consensus mechanism change from Proof-of-work(PoW) to Proof-of-stake(PoS). What does that mean to Flux?
To understand why this is such a big event, let’s first explain the difference between Proof-of-work and Proof-of-stake.
What is Proof-of-Work (PoW)?
PoW is a consensus mechanism that requires each validator to complete complex mathematical problems to produce new blocks on the blockchain. As PoW requires considerable energy to solve each mathematical problem, it is a highly effective method for stopping bad actors from gaming the system and taking complete control of the network.
The people who complete these complex problems to validate the blockchain are known as miners. The miners are financially rewarded for each block they confirm.
Satoshi Nakamoto pioneered proof-of-work with the release of Bitcoin, a peer-to-peer digital monetary system that uses PoW as its validation method.
What is Proof-of-Stake (PoS)?
PoS is a consensus mechanism that selects its validators in response to their holdings in that particular cryptocurrency. In other words, instead of having to complete arbitrary mathematical problems like PoW, PoS validates their transactions by confirming that each validator must have a minimum token amount to validate a transaction.
This minimum amount stops bad actors from taking control of the network as they would have to own a majority of the tokens on the blockchain to take control.
Why is Ethereum moving from PoW to PoS?
Since the creation of Bitcoin, an essential criticism of Proof-of-work is the sheer amount of energy required for each block to be validated on the blockchain.
As more political and social voices speak out against excessive energy usage and its effect on our climate and economy, many critics of the blockchain space have started to use PoW as a critical example of why the sector should never receive mainstream support.
Of course, Flux completely disagrees with that position, but more on that later.
Since Ethereum came online in 2015 with its revolutionary smart contracts, the blockchain has continued to grow as the number one destination for decentralized applications.
Because Ethereum desires to be the leading blockchain for decentralized applications, they are attempting to solve scalability issues and reduce their environmental footprint by migrating to Proof-of-stake. According to the Ethereum Foundation, they believe that the move from PoW to PoS will reduce energy consumption by 99.95%. Now, that number is hard to ignore for those blockchain critics.
With Ethereum moving to PoS, what does this mean for the future of PoW mechanisms?
The future of PoW
Blockchain mining is so large that Bitmain, a Chinese company that builds the computer chips needed for ASIC mining, is valued at $40billion. As influential as Ethereum is to the blockchain space, the sheer size of the mining industry within crypto and the amount of people who still believe PoW is superior to PoS means that there will always be a demand for other PoW blockchains to fill the void left by Ethereum.
That’s where Flux steps in.
Flux becomes King
As one of the largest forks of Bitcoin, Flux has always supported proof-of-work since its inception, and always will.
Flux is now the largest decentralized computational networks in the world, hands down. We offer the computational resources to host applications or websites across a decentralized cloud service.
Flux enables miners to use their GPU power to secure the Flux blockchain. It uses an ASIC resistant mining algorithm to keep things as decentralized as possible. Flux is very friendly to the mining community and focused on creating a highly incentivized ecosystem for miners. Flux also uses its computational nodes to secure the network alongside the miners creating a very secure and highly decentralized network.
In our recent state of the union address, we stated our commitment to decentralization and the future of PoW blockchain validation. As part of our internal forecasts, we predict that the number of DApps hosted on Flux will grow by 100x in the next five years. With the increased network growth the demand and price of Flux will increase making Flux mining more profitable.
In our mission, Flux has also committed to sustainability, and we believe that PoW can be compatible with this philosophy and that it is not the destructive force that some people claim it to be. However, we also believe that the current PoW needs improvements as it uses substantial computational resources to complete arbitrary algorithms when it could be solving real-life problems.
That has led us to Proof-of-useful-work(PouW). PouW is a consensus mechanism that allows the Flux node holders to validate the blockchain by solving useful complex computational problems. We see a future where Flux node holders will be using their computational power to help solve real-life problems in AI, neural networks, medical research, and much much more.
As Flux continues to grow the number of applications on the chain and release its industry-leading proof-of-useful-work mechanisms, Flux will undoubtedly become the king of PoW.
To learn more about Flux and how to join the Flux community, join us at runonflux.io