Ethereum’s Revolutionary Proof-of-Stake (PoS) Protocol and it’s Battle Against Centralization

Proof-of-Stake (PoS) has some clear-cut advantages of PoW that I’ll highlight quickly:

  • PoS is MUCH more ecologically efficient than proof of work and leaves a significantly smaller carbon footprint than PoW mining. Currently, the global Bitcoin network is consuming more than seven gigwatts of electricity. Over the course of a year that’s equal to around 64 TWh or terawatt hours of energy consumption. That’s more than the country of Switzerland uses over the same time period!
  • Decentralization in protocols that use PoW has come under attack in recent years, as the companies that have control of the newest and most efficient mining hardware (called ASICS) have almost a total monopoly on the incoming BTC supply. You can check out the state of mining for BTC here. PoS removes mining from the consensus mechanism and makes the constant chase for the newest mining hardware obsolete. Although PoS will also have its challenges to avoid centralization (staking cartels, centralized exchanges holding huge amounts, etc.), the consensus mechanism is much better suited for a more decentralized process.

Here’s a brief breakdown of what’s currently necessary to run an ETH 2.0 node and be involved directly in securing the network (you can learn more here):

- A three year commitment to staking 32 ETH and maintaining a validator node

- 32 ETH (plus <1 ETH for gas costs)

- $717.12 (three-year reserved instance pricing for an m5.xlarge instance) + 120 (one year’s cost of 100 GB of storage, conservatively assuming nearly full storage capacity) = $837.12 paid over the course of the year to AWS

- MetaMask Extension

- Infura Account

- Configured AWS instance (three year commitment, can be less but you save money with more time and you are locked in) with hardened security features

- Import verification keys, run Teku, setup monitoring

So how can we fight the impediments that threaten to make ETH 2.0 more centralized and give power back to the average user?

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