2022 will be the year that proof-of-stake is activated on the Ethereum network (at least we hope so). It is expected that the update will increase the scalability of the network without compromising decentralization.
Here are the four main changes that will take effect after proof-of-stake is activated:
1. Reduced energy consumption.
Changing the consensus algorithm will eliminate the need for miners and replace them with validators. According to the Ethereum Foundation, the transition will reduce energy consumption by 99.95% of current values.
2. Deflationary Ether
The Ethereum Foundation has calculated the impact of proof-of-stake and EIP 1995 on the amount of ether in circulation. According to them, the burning of ETH in combination with low rewards and ether blocking will reduce the circulation of ETH to 27.3 - 49.5 million coins.
In comparison, the current supply is 118 million and the asset is still inflationary even after the implementation of EIP 1559.
3. Same runtime
After the transition, the current Ethereum runtime will be migrated to the new proof-of-stake blockchain. It will be supported by all clients currently running Eth1. Existing users and application developers will notice little or no change when interacting with the network.
4. Increase in (possible) transaction costs
And while it is impossible to predict, it is quite possible that after the merger, fees will either increase or cost about the same. After the update, many new users and companies may start using the new technology, which will increase the demand for space in the blocks. However, future updates like sharding and roll-ups may help overcome this problem.
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According to www.coindesk.com
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