ETH2.0 will be launched soon, what does the new consensus mechanism mean?

The ETH 2.0 mainnet will be launched in the third quarter of this year, and many people are paying attention.

One of the main changes in the new mainnet is the change in the consensus mechanism, which greatly reduces the barriers for investors to participate and greatly reduces waste of resources.

This article will mainly introduce the significance of the consensus change to ETH.

The background of ETH 2.0

Looking back on the development history of ETH, due to The DAO event, ETH hard fork was divided into ETC and ETH.

In order to avoid the fork risk caused by the PoW (Proof-of-Work) consensus mechanism, reduce the gas fee consumed by mining and other activities, and improve the efficiency of ETH mainnet transactions, the ETH community plans to replace the original The PoW mechanism is changed to CPoS (Casper Proof-of-Stake), which is ETH 2.0 mode.


ETH 2.0-from PoW to PoS

As early as 2016, the ETH community planned to change the consensus mechanism and algorithm. With the improvement of the consensus mechanism and the Staking economic model, the ETH 2.0 mainnet is initially planned to be launched in the third quarter of 2020.

The change of consensus mechanism: from PoW to CPoS

(1) ETH 1.0 under PoW

Proof-of-Work (PoW) essence is that miners use their own computing resources to mine, and mining pools organize the mining power of the miners to mine, whether it is an individual miner or a mining pool. Who has more computing power, the higher the probability of successful mining package.

In layman’s terms, under the PoW consensus mechanism, computing power is king! Who controls more computing resources, who can earn more income in the future!

Under the consensus mechanism of PoW, ETH 1.0 not only consumes a lot of power resources and fuel costs, but also is prone to fork.

Although the cost of mining with computing power and the fuel cost are extremely high, it is difficult for individual households to participate in it, but the speculative benefits brought by it are unimaginable. Driven by profit, the dedicated mining machine of ETH is also constantly updated.


ASIC chip for ETH mining

But “when a method of making money is well known, it is when this method of making money fails”, more and more computing power participates in the process of ETH mining, the intensity of competition intensifies, plus the computing power of ETH mining Being controlled by several mining pools, it is difficult for self-employed to earn income from it.

(2) ETH 2.0 mode under CPoS

In order to overcome the limitations of PoW in ETH 1.0, a wider range of investors can participate in the process of ETH mining.

In the ETH 2.0 mode under the CPoS consensus mechanism, ETH will no longer need the mining process. The verification and confirmation of the new transaction block will be completed by the block validator, and the block validator will choose according to the proportion of its miner’s shareholding.

A block validator is like a verifier who proves that “you really hold the share ratio at a certain moment to determine the packaging probability.”

In layman’s terms, the shareholding ratio is king! The higher the proportion of the equity stake pledged, the greater the probability of mining success. There is no doubt that ETH 2.0 greatly reduces the entry barriers to mining and effectively reduces the waste of resources.


CPoS adopts Staking mode to pledge ETH mining

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