"We are very comfortable in Asia and we are the leader here, but we need a new emphasis, we need to go global," Jun told the FT.Īccordingly, the exchange is looking to quadruple its headcount from the current 1,000 as part of its efforts to expand globally. As a result, Ethereum mining is still largely performed using off-the-shelf graphics cards, allowing ordinary Ethereum users to participate.To offset the loss in revenue from the Chinese market, Huobi plans to expand its offering in other countries. So Buterin developed a new mining algorithm designed to be "memory-hard"-and therefore difficult to accelerate with custom hardware. By that point, bitcoin mining was already dominated by specialized silicon optimized for computing huge numbers of SHA-256 hashes, locking ordinary bitcoiners out of the mining game. When Vitalik Buterin launched Ethereum in 2015, he used a variant of Nakamoto's scheme. (Check out our in-depth bitcoin explainer for details on how this works.) As long as honest miners have more hash power than malicious miners, users can be confident in the integrity of the blockchain-and hence in the integrity of payments made using the bitcoin network. Bitcoin's pseudonymous founder Satoshi Nakamoto's big insight-the one that made bitcoin possible-was that this problem could be solved using the principle of "one hash, one vote." On the bitcoin network, whoever has the most computing power-specifically, the capacity to compute SHA-256 hashes-has the most influence over which blocks get added to the blockchain. The big challenge for any blockchain project is preventing a malicious party from creating many sock puppet accounts to "stuff the ballot box," outvote the honest participants and thereby tamper with past transactions. If a sufficient number of other network participants accept the block, it becomes the "official" next block in the chain. As long as most network participants are honest, users can have confidence that transactions accepted by a majority of the network won't be removed or modified later. Then other network participants verify that the block follows the network's rules. AdvertisementĪt a high level of abstraction, here's how any blockchain works: Someone on the network proposes a block containing a list of recent transactions.
But critics worry that the new scheme could cause the Ethereum network to become overly centralized-and hence vulnerable to government regulation.
Ethereum will jettison mining series#
Ethereum founder Vitalik Buterin believes the Merge will lay the foundation for a series of future upgrades that will allow the network to handle a much larger volume of transactions in the coming years. So the price of used graphics cards might continue to fall as Ethereum miners exit the industry.īut the switch to proof-of-stake is much more than just an energy-saving measure-it's a major overhaul of the Ethereum network. The new system for updating the Ethereum blockchain doesn't require the same kind of beefy hardware-or the massive electricity bill that goes with it. Over the last seven years, thousands of people have bought high-end graphics cards to help maintain the Ethereum blockchain-and to earn newly created ether in the process. The most immediate consequence of a successful Merge will be to put the world's Ethereum miners out of work. Further Reading Bitcoin’s massive energy use faces $5M shame campaign from environmental groups
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