NFT

Ethereum Foundation: Switching to PoS will not reduce the commission

Due to the spread of a number of misconceptions, Ethereum developers have issued clarifications about the upcoming merger. The “soft” end date is September 19, and most of the improvements will appear as a result of future updates.

Now miners are responsible for the decentralization and collection of transactions into blocks. Due to the growth of their number and the improvement of equipment, there is a continuous increase in complexity, which ultimately leads to an increasing power consumption of networks on PoW. Last year, Elon Musk suspended the sale of Tesla (NASDAQ:TSLA) for Bitcoin, citing its lack of ecology.

If the success of the miner in calculating the hash function directly depends on the power of the equipment, then the reward of the validator is related to the amount of staking. With the transition of Ethereum to PoS, the energy consumption of the network, according to the developers, will decrease by 99.95%. This parameter will change immediately after the merge, but the rest of the characteristics will have to wait.

Commissions

The main pain of users are commissions during periods of high network load. Since the average speed is 13 transactions per second (TPS), users are forced to increase tips to miners so that their transfer is processed as soon as possible. Sometimes it was necessary to pay over $50 for the prompt execution of the payment.

The merger will not affect the commission, as the network speed will be 12 TPS, which is slightly better than the previous indicator. Future updates and the introduction of sharding will have a significant impact on the commission. This is a method of dividing the network into autonomous segments (shards) that will independently process transactions. It is expected that sharding will be implemented within a year after the transition to PoS, and the speed will eventually exceed 50,000 TPS.

Unlocking ETH

To receive passive income and participate in staking, validators block ETH, which can be extracted much later than the merger. At the moment, the total blocked amount is 13.3 million ETH (~$24.7 billion), which exceeds 10% of the network’s capitalization.

These funds will become available after the Shanghai upgrade, which is expected within 6 to 12 months after the merger. But even with the arrival of the security update, the speed at which validators will be able to output blocked ETH will be limited. At the same time, tips will be available immediately.

For the crypto community, the change of the consensus algorithm by the leading altcoin is a historic event. If successful, a number of experts predict Ethereum will win over Bitcoin in the overall ranking in the long term. After the approval of September 19 as the final date, the ETH/BTC pair grew by 44%.