- Ethereum has undergone a technical upgrade and this upgrade is called the ‘Merge’.
- Ethereum has changed its algorithm from the Proof-of-Work (PoW) consensus method of setting transactions to the Proof-of-Stake (PoS)
- Ethereum is introducing a new programming language that will help developers build more robust decentralised applications.
- PoW algorithms are used in most blockchains. PoW is a system of distributed consensus that relies on computing power to prove that someone has put in the required amount of work to create a valid block proportional to their influence on the network. These algorithms create a trust less system e., trust the system and not one person or one organization.
- PoS is a type of consensus mechanism used to validate cryptocurrency transactions through randomly selected validators. With this system, owners of the cryptocurrency can stake their coins, which gives them the right to check new blocks of transactions and add them to the blockchain. This is known as concept of staking.
Significance of the upgrade:
- Increased scalability: Decreased size of blocks will reduce amount of data that nodes need to process making the network more scalable and easier to process more transactions per second while maintaining the same level of security.
- Easy to store: Make it easier for people running nodes to store the blockchain on less expensive hardware. That will make the network more resistant to spam attacks
- Reduce the amount of energy required to secure the network will make it more environmentally friendly and attract more users.
- Concept of staking: meaning locking up your tokens like depositing money in a savings account. The more tokens you stake, the more influence you have over the network.
- Faster transaction times due to less gap between blocks
- Low transaction latency
- No need for hardware mining infrastructure: due to trust less, distributed consensus algorithm that doesn’t require costly hardware.
- Launched in 2014 second-largest cryptocurrency in the world
- Ethereum is a decentralized, open-source blockchain. Ether is the native cryptocurrency of the platform.
- Ethereum was conceived in 2013 by programmer Vitalik Buterin.
- Ethereum today has the highest adoption among developers and it is the primary infrastructure layer of Web3.
- The need of the hour is to work on an indigenous solution of the people, for the people, and by the people.
- A digital infrastructure based on blockchain technology will transform the digital ecosystem in India, and will enable the future of digital services, platforms, applications, content, and solutions.
- Considering the current situation worldwide, one can safely assume that we are at the beginning of the curve, but the days are not far.
MUST READ: India Blockchain Platform
Source: Indian Express
Previous Year Question
Q.1) With reference to Web 3.0, consider the following statements: (2022)
- Web 3.0 technology enables people to control their own data.
- In Web 3.0 world, there can be blockchain based social networks.
- Web 3.0 is operated by users collectively rather than a corporation
Which of the following given above are correct?
- 1 and 2 only
- 2 and 3 only
- 1 and 3 only
- 1, 2 and 3
Q2) With reference to “Blockchain Technology”, consider the following statements: (2020)
- It is a public ledger that everyone can inspect, but which no single user controls.
- The structure and design of blockchain is such that all the data in it are about cryptocurrency only.
- Applications that depend on basic features of blockchain can be developed without anybody’s permission.
Which of the statements given above is/are correct?
- 1 only
- 1 and 2 only
- 2 only
- 1 and 3 only