Core Ethereum developer Preston Van Loon told the audience at the Permissionless conference hosted by Blockworks at Palm Beach, USA  that the network’s long-awaited transition to proof-of-stake will most likely happen this August.

“As far as we know, if everything goes to plan, August—it just makes sense,” said Van Loon. “If we don’t have to move [the difficulty bomb], let’s do it as soon as we can.”

Ethereum Foundation Justin Drake also said that there’s a “strong desire to make this happen before [the] difficulty bomb in August,” according to a tweet from event co-host Bankless.

The Merge

This transition event is called The Merge. It’s when ​​Ethereum Mainnet will “merge” with the Beacon Chain, becoming its own shard that uses proof-of-stake instead of proof-of-work. 

Many are waiting for The Merge because it’s expected to reduce the issuance of ETH by almost 90%. Less ETH means there will be less supply and higher demand. This is expected to push the price of the coin up. Once The Merge has been implemented, the price of ETH may reach its all-time high of $4,891, set in November 2021.

Transitioning to a Proof-of-Stake version is one of the major components of Ethereum 2.0. The Ethereum 2.0 upgrade was initially expected in January 2020 but has been delayed multiple times due to security concerns and other technical issues. However, the developers have stated that they are determined to make the transition to the new blockchain platform happen as soon as possible and are confident that it will happen this year. 

Ethereum: Proof-of-Stake vs. Proof-of-Work? 

Proof-of-Stake (PoS) is a type of consensus algorithm in which miners who want to receive a block reward must “stake” their coins in the blockchain. This stake can be in the form of coins or transaction fees and is held by the node as a bookkeeping liability until the block is successfully mined. PoS is used in some cryptocurrencies such as Cardano (ADA), Cosmos (ATOM), and TRON (TRX) to achieve distributed consensus through voting for the best block. PoS is more efficient, eco-friendly, and sustainable than Proof-of-Work (PoW).

On the other hand, PoW is an algorithm in which miners solve cryptographic hashing problems to validate and record transactions into a public ledger. 

Despite Bitcoin’s popularity and success, Proof-of-Work is not an ideal consensus protocol for a cryptocurrency for several reasons. First of all, Proof-of-Work is energy-intensive and slow. It’s estimated that Bitcoin mining consumes as much power as the entire country of Ireland and is slower than a snail on rollerskates.

This leads to high transaction fees, which lower the incentive to use Bitcoin. Furthermore, Proof-of-Work is susceptible to brute force attacks from miners who have cheap electricity and can rent large amounts of mining hardware. Individuals or organizations with millions of dollars and enough electricity can flood the network and take down any cryptocurrency that relies on Proof-of-Work as its consensus protocol. For example, Bitcoin’s network has been attacked several times by miners who were able to buy up huge quantities of computer power and temporarily bring down the network’s transaction rate. Proof-of-Work is a temporary solution that will eventually fail and needs to be replaced.

Although Proof-of-Work is still the most widespread consensus protocol used in cryptocurrencies today, it is quickly becoming obsolete and will be replaced by Proof-of-Stake and hybrid systems in the future.