proof-of-work Archives - Coinmotion: Invest in Crypto Securely

The most important topics in the crypto market recently have been Ethereum's The Merge, the progress of mass adoption of cryptocurrencies, and new opportunities. These are the topics being talked about in the cryptocurrency world right now! Ethereum The Merge succeeded Happy Merge! Ethereum's The Merge was successfully completed last week, which means that the new blockchain operating model has now finally come into use. Ethereum switched to the proof of stake mechanism, which reduces the electricity consumption of the blockchain by more than 99.9%. With that, Ethereum also becomes more secure and scalable for large traffic. Vitalik Buterin, the founder of Ethereum, has also expressed his enthusiasm for the change in how the blockchain works and the removal of Proof of Work. “It has obviously been a dream for the Ethereum ecosystem since pretty much the beginning. We started the proof-of-stake research with that blog post on Slosher back in January 2014", Vitalik said on an Ethereum Merge Party Livestream. The update can be thought of as reinventing the laws of physics within the blockchain. Replacing factors dependent on the real world, such as electricity, devices, and computers, with a completely virtual entity is a revolutionary event. Of course, some hardware is needed to maintain the Ethereum network, but its energy consumption will decrease enormously, which indicates a big step towards sustainable development. Ethereum is the second most popular cryptocurrency in the world, so its transition to a greener model is not only good for the environment but also for the rest of the crypto market. Developers get to make better projects in Ethereum, which enables a wider adaptation of cryptocurrencies. How PoS reduced the energy usage of Ethereum? In the past, the maintenance of the blockchain required efficient mining equipment that runs around the clock and consumes electricity. Because of the profits from managing the process, it has become so popular that thousands of people around the world have acquired equipment for maintaining the network and making their own money. In the new Ethereum operating model, physical devices are no longer needed, but in practice, the network is passively maintained by staking, which is used to confirm transactions. Staking means locking tokens into the blockchain. The reduction of Ethereum's environmental harm also reduces the negative media attention caused by cryptocurrencies, which is good for the growth of global adaptation. The Norwegian central bank's digital currency Norway's central bank released a statement about a digital currency in development that will be developed on the Ethereum blockchain. The open source code for the digital currency has already been published on the GitHub platform, where developers can try out its functionality. In the test environment, you can test, for example, the transfer of ERC-20 tokens, the minting of new coins, and the compatibility of the test network with your own projects. However, the Norwegian central bank stresses that the current version of the code does not have, for example, Metamask compatibility and that only carefully selected usernames can make transactions. Testing of the digital currency has already been done for a few years, and a suitable platform for its publication has been searched for. The Ethereum blockchain has ended up being the central bank's choice. Norway's central bank is not the only one developing its own digital currency. In fact, the vast majority of central banks around the world have at least explored the possibility of digital currencies. Why do central banks make their own digital currencies? Currently, the central bank assembles a profit from selling money to banks. Banks see cryptocurrencies as a threat to their business. If the popularity of cryptocurrencies grows, it means less money for the banks, which in turn is very bad news for the central banks and their cash flow. Currently, central banks control economic growth by changing the key interest rate. Interest rates greatly affect the growth of the economy, for example, in that they directly affect the costs of loans, and thus the investments of companies and individuals are dependent on it. When interest rates are low, more investments are typically made. Central banks' thoughts on the introduction of digital currencies have caused a lot of debate in the media for and against it. The influence on the economy is currently limited and indirect, but with its own digital currency, the central bank could directly influence your wallet. That's why central banks are doing everything they can to get the digital currency at their disposal so that the power structure remains with the central bank. Milestone – Bitcoin has been around for 5,000 days The community celebrates 5,000 days of Bitcoin's existence. The Bitcoin network completed round days the other Sunday. When traditional banks were closed, the day was practically 5,000 days of activity in a row for the grandfather of cryptocurrencies. Miners continue to add new blocks to the chain approximately every 10 minutes. This means that for 5,000 days already, over 750 thousand blocks have been added to the Bitcoin network. Although Bitcoin has been operational for a long time, in 2013, the Bitcoin network was down for 6 hours due to a blockchain split. In practice, this short delay that occurred within a day is a little less than 3,500 days. The network operating rate has thus been 99.93% throughout the entire period, so the 5,000-day milestone is well deserved. How has Bitcoin been in business for so long? Bitcoin's operation is based on the fact that different computers around the world have an up-to-date version of the blockchain downloaded. When new blocks are added to the blockchain, the same information is updated for all machines. If a machine shuts down or doesn't work, the maintenance of the blockchain still works elsewhere because its information is already uploaded to the network. The maintaining entities receive a small fee for maintaining the network, i.e., confirming transactions. In practice, the fewer parties running the blockchain, the more attractive it is to go for it and the higher the reward. Bitcoin has remained upright for 5,000 days, among other things, thanks to the aforementioned reward system. When people are rewarded for maintaining the blockchain and have the opportunity to make money - why would they stop maintaining it? Compared to banks, the milestone of 5,000 consecutive days of operation is quite an achievement, as banks traditionally do not operate on public holidays, weekends, or weekdays outside of certain hours. Bitcoin's blockchain works around the world the same way every day of the year around the clock. In a blockchain, transferring funds is not only easy, but it is also affordable. The cost of transferring funds is based on the number of bits, so it doesn't make much difference whether you transfer a billion or 10 cents. The ease of transfer has been reported many times, as billions of dollars have been transferred with a fee of a few dollars. The bank might charge a few percent for transfers abroad, which when transferring billions means up to tens of millions in fees alone. Starbucks launches new NFT experience Coffee chain Starbucks' NFTs will be created on Polygon's blockchain. On Monday, Starbucks said on its website that its American loyalty members will have the opportunity to earn or buy NFT tokens. Each NFT has its own number of points, which indicates its rarity. The more NFTs a member has, the more points the member gets, which means access to various exclusive offers. The company says that the members' rewards range from virtual barista courses to visits to the company's coffee farm in Costa Rica. NFTs can also be won from Starbucks coffee-themed games or various challenges. Users can also buy NFT tokens from the company's own marketplace. All NFT tokens on the blockchain are made by Starbucks' own and partner artists. Part of the proceeds from the sale of rare tokens will be donated to support the activities of their artists. Starbucks' marketing manager has said that the company is leading the way in the development of Web3 technology and connecting members to the company on a deeper level. Why are the big chains joining the Web3 world? The big chains have noticed a new generation's interest in cryptocurrencies. The sooner you get involved with new technology, the better you can get into it. Many different chains have gone to the metaverse, for example, and sold virtual accessories. Adidas shoes could be bought in virtual worlds, and they could be presented on top of a digital avatar. NFTs have become an important part of the crypto world. You don't have to care which device you use to log in to the virtual world because the digital wallet works the same everywhere, and you can keep your NFTs there. NFTs equipped with smart contracts can be utilized in many different ways, and we have only begun to understand their potential. Dogecoin is the second largest PoW crypto in the world With Ethereum's new update, Dogecoin has become the world's second-largest Proof of Work (PoW) cryptocurrency by market capitalization. Even though the value of Bitcoin has fallen wildly recently, it still has a long way to go to Dogecoin. Dogecoin is followed on the list of PoW currencies by Ethereum Classic, Litecoin, and Monero. Dogecoin’s number two spot confronts the community; some think it’s good, and some think it’s bad. How can cryptocurrencies be taken seriously if a cryptocurrency made as a joke is second only to the world's most popular crypto, Bitcoin? Since 2021, the Dogecoin community has been thinking that Dogecoin should move away from mining and follow Ethereum to Proof of Stake technology. Vitalik Buterin, the founder of Ethereum, is an advisor to the Dogecoin community, which in part contributes to this change in mindset. So far, however, the transition seems to be only a distant dream, as no real steps have been taken to achieve it yet. Create your account with Coinmotion today to start investing and spending cryptocurrency. The views, thoughts, and opinions expressed in the text belong to the author and not necessarily to the author’s employer, organization, committee, or other group or individual. 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