(NewsSpace.com) – The second largest crypto platform next to Bitcoin, Ethereum, wrapped up testing on a new verification method that could change the industry and open new doors to the future. The company hopes to move its new model, called “proof of stake,” live to the main web in September. The process will tighten the coin’s carbon footprint, lower computational requirements, and give new life to the non-fungible token (NFT) market, which originated on the Ethereum chain.
What’s the Big Deal?
Cryptocurrencies run on blockchains, which require massive amounts of energy to sustain. When Bitcoin first arrived, the chain offered cash rewards for solving advanced math problems that only those with massive computational abilities could perform. Solving these questions results in a successful transaction, and the resulting ”coin” is the reward. Each transaction has a “gas” fee, and all crypto platforms use the same framework.
The method to verify the transactions on Bitcoin’s blockchain is called “proof of work.” Simply put, it’s the record of the problem solved to mint a coin, and the proof of work method lets users (or computers) solve each math problem on their own.
The method Ethereum plans to migrate to is different.
Rather than using “proof of work,” which is more energy intensive, Ethereum is adopting a “proof of stake” model. This method allows individual investors to front their coins on the blockchain, making it more energy efficient and allowing for some passive income.
Essentially, the chain only requires proof of transactions and consensus among users to survive once it’s established. To keep them honest, these digital accountants will back their work with a substantial stake of their own coin.
The new method reduces computing needs exponentially, which is the main downfall of the crypto universe. There’s a good chance every other crypto company is watching the tests very closely.
New Life For NFTs
NFTs are best described as the sales receipt of the digital collector’s market. Unlike Bitcoin or Ether, each token is unique and can’t be traded for another equally. It’s an exciting new way for artists, creators, collectors, and investors to play in a blossoming new universe. The market exploded but, like most things crypto, the bubble eventually burst.
One of the main issues with NFTs is the cost involved. Because a non-fungible token can store virtually anything that fits in a file, more complex tokens require more time and energy to validate and add to the chain. Enthusiasts may see some new life from what many see as an underappreciated asset, as NFTs originated and still primarily reside on Ethereum’s evolving chain.
Will Investors Have To Do Anything?
The move to the new verification method passed its final test and should be live sometime in September. Those with Ether in their crypto wallet won’t have to do anything, as the shift will be seamless. That doesn’t mean there may not be bugs or kinks to work out, but there won’t be any form of transfer or exchange of current tokens.
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