Amid the lingering bear, Ether jumped from $1,250 to nearly $1,500 over the weekend after news of a confirmed date on “the fusion’which will merge the current one Ethereum Mainnet with the Beacon Chain proof-of-stake system.
This, in turn, marks the end of proof-of-work for the OG DeFi chain and the full transition to proof-of-stake to enable cheaper, faster and eco-friendly blockchain operations. Nevertheless, the less popular chain – Algorand pushes its crypto extraction mechanism of pure proof-of-stake (PPoS) as “the best technology in crypto”.
In a recent interview with the Block, Staci Warden, CEO of the Algorand Foundation, emphasized that upcoming developments “will harness the power of Algorand’s technology for global well-being.” She stressed that foreseeable progress will increase Algorand chain’s current state of supporting 1,000 transactions per second and 4.5 seconds settlement time to 10,000 transactions per second and 2.5 seconds settlement time by the end of 2022.
The Algorand PPoS protocol, which is based on the Byzantine consensus, randomly chooses validators regardless of the size of the assets they have committed to the blockchain, furthering the distributed consensus concept. Unlike Algorand’s PPoS, Ethereum and its PoS require validators to lock or bind their interest to affect block generation, furthering economic polarization.
In light of this difference, Algorand’s CEO claimed that they can solve problems such as lack of financial inclusion with their blockchain technology. She said,
“Obviously, when you have a machine like that, you start thinking big — and so we think in terms of very big global problems.”
After this, she also stated that the Algorand Foundation’s upcoming partnership with an organization that will make 4G mobile phones with Algorand’s technology available to people in Africa will give them easy access to financial services.
A Bitcoin PoW is a no-go but Ethereum PoS for the win?
The European Central Bank (ECB) recently addressed the two crypto extraction mechanisms — Proof of Work (PoW) and Proof of Stake (pos), weigh them against their ecological footprint. The report highlighted that consensus mechanisms such as PoW require massive amounts of computing power. Following this, the financial institution noted that,
“Government agencies should evaluate whether the excessive carbon footprint of certain crypto-assets is undermining the achievement of their green transition to net zero greenhouse gas emissions.”
The Central Bank argued that while government agencies such as the European Union (EU) should not be allowed to stifle innovation, “the benefit to society of bitcoin itself is questionable”, given the principled benefits and technological applications of blockchain technology still unknown. In addition, the ECB compared PoS to the crypto version of an electric vehicle, while PoW was compared to a fossil fuel car.
ECB stated that
“It’s hard to see how authorities can choose to ban gasoline cars for a transition period but turn a blind eye to bitcoin-type assets built on PoW technology, with footprints in energy consumption and annual carbon emissions currently the most. eurozone past and target countries’ GHG savings”.
In an effort to solve the environmental impacts of crypto mining while promoting innovation, the bank proposes that authorities restrict or ban PoW, or encourage energy-efficient consensus mechanisms such as PoS.