Ethereum blockchain in collaboration with Consensys and DeepWork Studio today, July 27th, announced its Eth2 Validator Testnet version to give the community a feel of what the Proof of Stake version of Ethereum blockchain will look like.
Instead of miners that do complex calculations in a proof of work consensus algorithm, the proof of stake consensus allows validators to stake coins to secure the blockchain, validate transactions, and find new blocks. Validators are rewarded in proportion to the coins they stake in PoS. Proof of Stake algo is more widely accepted because it doesn’t require much processing power from computers or nodes thus leaving a green signature on the Earth. Bitcoin, on the other hand, runs a Proof of Work algorithm which consumes much energy, making its mining quite centralized and not suitable for areas with high energy charges.
According to the announcement, Ethereum is launching a in-house validator in contrast to a third-party service to give the users the total control and security of their accounts back into their own hands. Validators will be able to generate their own validator keys just like having a decentralized wallet.
“The first mission of the launchpad is to help validators educate themselves about all aspects of the process. Above all, we want to make sure validators know what they’re doing, and why they’re doing it.”
This will help validators understand that their security is in their own hands. ETH2 is set to operate as a separate chain while Eth1 which runs a Proof of Work consensus still continues for a while. The validator launchpad, for Ethereum, is the first step to the blockchain transition to PoS.
The validator rewards are set to be dynamic, according to the announcement:
“In plain English, if the total amount of ETH staked is low, the annual reward is high, but as the total stake rises, the reward received by each validator starts to fall.”
Validators must understand that their staked coins can be slashed if they behave maliciously. This is a security measure that is set to protect the whole network and to ensure each validator participates actively in the blockchain consensus.
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