The next halving on the Ethereum platform is scheduled to take place next year. When the block reward is cut in half, the total supply of Ether is produced. Ethereum’s creator, Vitalik Buterin, believes that this process will allow Ethereum to grow over time as an accessible and fair computing platform without the need for people to sell tokens to fund network development.
With the largest hard fork to date, Ethereum successfully surprised the cryptomarket. Their Blockchain underwent a “triple halving,” with the block time dropping from 12–14 seconds to 6–8 seconds. But what exactly is Ethereum? What exactly is Ethereum Triple Halving? Why is this happening? Is it important? And what will happen, according to experts, when the triple halving occurs?
Ethereum is a blockchain-powered platform best known for its native cryptocurrency, Ether, or ETH in trading pairs, or simply Ethereum. The nature of blockchain technology is what secures the Ethereum platform, and that security allows ETH to accumulate value.
The Ethereum platform supports Ether as well as a network of decentralized apps, or dApps. The Ethereum platform’s smart contracts, which originated on the platform, are a critical component of how the platform operates. Smart contracts, in conjunction with blockchain technology, are used in much-decentralized finance (DeFi) and other applications.
In 2021, Ethereum was the second most valuable cryptocurrency in the world, trailing only Bitcoin.
How does Ethereum Works?
Consider a very long chain of blocks linked together, with every member of the blockchain network knowing all of the information about each block. The Ethereum network is maintained by a vast network of computers worldwide. Users of the platform can build, publish, monetize, and use a wide variety of applications. ETH and other cryptocurrencies cannot compete with the Ethereum platform in terms of application support.
Proof of Stake & Proof of Work
Proof of work is a race to solve an equation by miners to get rewarded with verifying transactions which results in getting paid to do so. The equations are difficult and the process of miners competing and solving these equations takes up a lot of energy. Ethereum, like Bitcoin, currently employs a Proof-of-work consensus protocol (PoW). This allows the decentralized Ethereum network to reach consensus on issues such as account balances and transaction order This prevents users from double-spending their coins and makes the Ethereum blockchain extremely difficult to attack or manipulate. Ethereum is in the process of moving from proof-of-work to proof-of-stake, no one knows the exact date this will be complete.
Proof-of-stake is a consensus mechanism that blockchain networks use to achieve distributed consensus. You must be a validator on the network to be part of the proof of stake, users must stake their ETH. Validators, like miners in proof-of-work, are in charge of ordering transactions and creating new blocks so that all nodes can agree on the state of the network. Validators do not require significant computational power because they are chosen at random and are not competing. In this case, it’s not mining blocks (solving equations), they create blocks when randomly chosen and validate proposed blocks when they are not. This is extremely efficient when compared to proof of work.
What exactly is halving in the crypto-world?
Halving means in the crypto world is halving the reward per block to miners. Ethereum and Bitcoin are using the Proof of Work Consensus mechanism that consumes computing capacity and slows transactions due to the nature of mining coins, which are extremely energy-consuming. Not only are there environmental concerns, but PoW also requires an increasing amount of time per puzzle, making blockchain slow and inefficient in urgent situations such as sudden price fluctuations. but in Ethereum 2.0. It will be migrated to proof of stake that consumes less power, manages volatility, and improves security has been a consistent request from users, developers, investors, and buyers.
What is Ethereum Triple Halving?
Ethereum 2.0 was created specifically to address the scalability issues that are currently preventing wider cryptocurrency adoption by providing users with more incentives than ever before. Even if you are a member of the Ether network and have some stakes saved up, you will be rewarded. Instead of rewarding blocks with the most computing power, you will receive a 1% share for every ETH token you own when writing and submitting your block. It will also allow you to participate in liquidity pools with your own stake, allowing you to earn from multiple DeFi protocols that are on the chain and in which you participate.
Why is it happening and is it important?
Ethereum went on an upgrade called London Hard Fork that uses a form of EIP-1559. The EIP-1559 upgrade when completed will change from a proof-of-work to a proof-of-stake system. It is important because it gives users more power because they will be able to verify transactions and earn coins, whereas the former allowed miners to do so by utilizing massive computing power and the combination of EIP-1559 and the transition to a proof-of-stake Ethereum 2.0 would reduce sell pressure by an estimated 90%, the equivalent of three Bitcoin halving, hence the term “triple halving.”
What will happen after triple halving?
According to some experts, it will occur between early 2022 or early 2023.
What do the experts think will happen as a result?
Well, there are many benefits that will happen once the eth 2.0 is completed, such as following:
- Ethereum will be more stable and have fewer price fluctuations.
- A more stable network that consumes far less energy
- More DeFI applications are being developed to promote financial decentralization, parallel economies, and metaverse gaming.
Just a note: Please do your own deep research to know more about eth 2.0 and upcoming updates.