Public Testnet Blockchain is Now Available for Ethereum Proof-of-Stake Algorithm
According to recent reports, Vitalik Buterin is one step closer to fulfilling his goal of replacing Ethereum’s Proof-of-Work (PoW) protocol with Proof-of-Stake (PoS). As such, the Ethereum 2.0 PoS Testnet beacon blockchain is officially live, and ready for testing by any interested party.
To put things better into perspective, the switch to PoS is part of the Ethereum 2.0 blockchain plan, which aims to improve the payment network’s functionalities by providing a solution to the scalability problem, while also refining decentralization, security and the mining protocol. Following the announcement, it was also stated that the switch to Ethereum 2.0 will not take place via a hard fork as initially expected. Rather, Ethereum users will be able to transfer their tokens via a one-way smart contract transaction.
As part of the announcement, Van Loon, the co-founder for sharding development at Prysmatic Labs has mentioned that sharding will indeed by implemented with Ethereum’s new version. Shards can be described as individual chains running on-top of Ethereum’s blockchain, which can actively manage transactions and smart contracts, while remaining connected to the main chain. There are several benefits associated with this implementation, as explained by Van Loon: “Having shards allows for horizontal scalability of the system, as transactions can be processed in parallel compared to the current Ethereum Proof-of-Work chain.”
The PoS switch means that miners will become obsolete, and will be replaced with validators. These are computer operators that work together towards validating transactions. Rather than leveraging powerful computer hardware to figure out the solution to the PoW problem, validators simply stake ether as a guarantee for the authenticity of their work. At this moment in time, the economics of the PoS protocol are still under development, yet it is expected that profitability rates will fall for validators, when compared to Ethereum miners. Economic projections showcase a 5% annual profit for a stake of 32 ETH. The yield falls even lower when taking maintenance and electricity costs into account.
Those who are interested in joining the testnet can learn more by accessing the Prysmatic Labs guide. It is important to point out that at this time, the testnet does not support smart contracts, and comes in a technical configuration that will certainly undergo technical changes before the adoption of Ethereum 2.0.
Reports indicate that the code required for the first part of the transition to the PoS consensus protocol will be completed within 1-2 months. At this time, developers are unable to predict when the switch to PoS will occur.