Ethereum (ETH) creator believes that staking could be a $160 million industry
Vitalik Buterin, the creator of Ethereum (ETH), recently brought out a proposal that could change network staking rewards forever.
Moving up in the world
His proposal involves raising rewards for validators on the Ethereum blockchain, reports Coindesk. This, of course, is being done before Ethereum 2.0 sees implementation.
It is believed that the 2.0 upgrade is worth $17.5 billion. The change intends to be rid of bottlenecks and lower transaction costs overall.
As you may know, the current Ethereum network relies on proof-of-work similar to Bitcoin (BTC). 2.0 will switch over to the popular method of proof-of-stake, instead. Here, we have validators stake their own money in validating new blocks and get a reward out of it. This is a more environmentally friendly way to approach things and one that’s worth a lot of money.
Fredrik Harryson the CTO of Ethereum client Parity, went into this a little more:
“In a proof-of-stake system, your cost of attack is just buying tokens. You basically want it to be unreasonable that anyone would be able to buy so much tokens that they’re able to attack the network.”
Incentivizing is key
However, in order for a network’s value to increase that much, there has to be some form of incentivization. How much of a reward should these validators see? Especially when there will be so many on the network?
Implementing Buterin’s change will alter the way users buy Ethereum. Users will have to look at the currency a little differently, as it won’t be something one can just mine. Stakers put their money on the line, and they need to be sure that risk is worth it.
Harryson explains this a little more:
“There’s a sliding scale of rewards that depends on how much ETH is locked up in stake. In a system where you have very small amounts of stake locked up, you want to encourage more people to stake and lock up more ETH to increase the security of the chain.”
Overall, Buterin’s proposal isn’t an exact thing as of yet. It’s simply a suggestion and one that the network will have to examine and provide feedback on. That said it’s one that could shake up the network forever and should be decided on before the implementation of Ethereum 2.0.
The post Ethereum (ETH) creator believes that staking could be a $160 million industry appeared first on InsideBitcoins.com.
InsideBitcoins.comhttp://bit.ly/2FUbkJa April 27, 2019 at 04:43AM @BruceDayne, @Max Moeller April 27, 2019 at 05:18AM
