On Sept. 15, Ethereum blockchain changed from a proof of work (PoW), to a consensus mechanism that is proof-of–stake (PoS). 15, 2022. ETHPoW, a separate PoW blockchain (basically, the pre-Merge Ethereum), was also made live. This forked Ethereum version aims to preserve the proof of work mining process for ETH miners.
Any miner can add a block to PoW network, with the strict stipulation that only the first valid block published will be the correct one. Due to latency in data propagation, the network may discover more than one valid block at a time, creating multiple branches of the blockchain known as a fork.
This article will cover the proof-of work Ethereum fork, history of PoW Ethereum, and differences between ETHW and ETH.
What is ETHPoW?
The long-awaited upgrade “The Merge” for Ethereum has reduced the requirements for miners. They were replaced by validators who stake Ether ( Ethereum), rather than using expensive and energy-intensive devices to protect the network. This greatly increased the cryptocurrency’s energy efficiency. However, a hardfork of Ethereum was made before the Merge. This fork still uses the PoW consensus method and led to a victory for ETH miners.
But who are the people behind ETHW, you ask? Chinese miner Chandler Guo launched the PoW-based Ethereum Blockchain in opposition to the PoS consensus system. Although the PoW Ethereum chain may be a win for miners over stakers it was not easy for ETHW users.
ETHPoW used the 10001 chain ID, but it was already being used by a Bitcoin Cash testing network. MetaMask cryptocurrency wallet users were faced with problems because the Chain ID, which acts as an identifier between two distinct blockchains, was not able to distinguish them.
Because there is no central repository or registry for Chain IDs, they can be chosen at will. However, pre-hard fork testing would have discovered the contradiction while the team behind ETHW did not. Despite this, cryptocurrency exchanges such as Binance and Coinbase supported ETHW. Binance, for instance, announced that its ETHW mining pool would be subject to the same review as other cryptocurrencies.
Similar: What’s a cryptocurrency mining pool?
What is PoW Ethereum (ETHW), and how does it work?
The PoW consensus method was the basis of the initial Ethereum network, i.e. Ethereum Classic. This version was however hard forked to secure it due to DAO hack. EthereumFair, and EthereumPOW are two other hard forks to the original Ethereum blockchain. They will continue to use proof of work mining.
Proof-of-work cryptocurrencies like Bitcoin (BTC) are promoted as a censorship-resistant, trustless type of digital money created after one person or a small group of people solve a mathematical puzzle and propose a new block. To prevent any miners from weakening the resistance to censorship by enacting rules, there must be many non-colluding miner processing transactions.
To prevent anyone abusing the system, ETHW miner will continue to solve arbitrary mathematical problems to validate transactions and create new tokens. They will receive ETHW as a native asset of the ETHPoW network in return.
How to Buy PoW Ethereum (ETHW).
Crypto trading platforms such as Crypto.com or exchanges like Coinbase or Binance are just a few of the places where ETHW supporters may purchase proof-of-work Ethereum tokens.
Binance, for instance, launched Binance Pool’s free Ethereum ETHW mining services that offer ETHW withdrawals. ETHW deposits are not allowed. Binance Convert allows users to trade ETHW for USDT and BUSD.
These are the steps you need to take in order to purchase ETHW on your preferred platform.
- Register on the platform/exchange you prefer and verify your identity.
- Once the identity verification is complete, you can deposit funds.
- After funding their account, users can access the trading section to buy ETHW.
Why do people use PoW Ethereum, you ask? Proof-of work is preferred by proof-ofstake critics because they have already invested heavily in mining equipment and will lose any revenue if they switch to PoS networks.
How do I store PoW Ethereum (ETHW).
To store ETHW, you can use either a hardware or software wallet. Software wallets can be used to store ETHW. Hardware wallets are more secure than software wallets because the funds are kept offline using wallets such as Ledger Nano S. Crypto-owners with software wallets have custody of their private keys, which is different from allowing them to be held on the exchange.
Similar: Ethereum wallets – A beginner’s guide for storing ETH
Mobile wallets can be used by users who are not connected to their computers often to store ETHW and other cryptocurrency. If the malware infects the device, it could result in the loss of funds. You can also use paper wallets to store private keys, and QR codes on a piece paper. If the document containing the information is lost, stolen, or accessed by unauthorized users, the owner of the ETHW will not be able to retrieve it.
ETH vs. ETHW
The Merge saw the Ethereum network split into two versions: ETH which uses the PoS consensus algorithm and ETHW which uses the older PoW algorithms. ETHW miners get rewards in the form Ethereum tokens for solving complex mathematical puzzles. Validators will need to stake ETH to generate revenue.
ETHW is attractive to miners as without a proof of work consensus mechanism, they could go bankrupt. New tokens will be added via the staking process. The proof-of-stake Blockchain is, however, not an alternative to the original Ethereum blockchain. It is a merger of the execution layer (mainnet), and consensus layer (Beaconchain) layers.
Below is a table that outlines the differences between ETHW and ETHW.
Future of PoW Ethereum
PoW’s incentive structure makes it necessary for network miners to perform many blocks hashes in order to get the first block hash. This results in unsustainable energy consumption. The consensus mechanism also adjusts the difficulty of block hashes upwards as network processing power increases, leading to a higher network hash rate.
Additionally, unsuccessful miners waste energy, which is why Ethereum has moved to a proof of stake consensus mechanism. ETHW is attractive to miners as they already have invested in mining equipment. However, PoS consensus allows for networks to scale more efficiently and is less energy-intensive.
Although proof-of-stake technology is still in its infancy it could revolutionize blockchain security and render mining obsolete. It remains to be seen whether PoS consensus algorithms will lead to the total cessation or partial cessation PoW mining.
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