Ethereum blockchain switched from proof-of-work (PoW) to proof-of-stake (PoS) consensus mechanism on September 15, 2022. Along with this move, ETHPoW, a clear PoW blockchain (basically the old pre- Melting). Ethereum) forked by Ethereum’s Merge, went live. This forked version of Ethereum aims to preserve the proof-of-concept mining process for ETH miners.
Any miner is allowed to add a block to the PoW network with the clear condition that the first valid block published is the correct one. In reality, more than one legal block is sometimes discovered by the network due to the latency of data propagation, creating many branches of the blockchain called a fork.
This article will discuss the proof-of-work Ethereum fork, the history of PoW Ethereum and the differences between ETH and ETHW.
What is ETHPoW (ETHW)?
The long-awaited “The Merge” update for Ethereum has reduced the demand for miners. It replaced them with validators that play Ether (ETH) rather than using expensive and energy-intensive devices to secure the network, significantly increasing the energy efficiency of the cryptocurrency. However, before the Merge, a hard fork of the Ethereum network, called ETHW, which still uses the PoW consensus mechanism, was created, leading to a triumph for ETH miners.
But who is behind ETHW? Chinese miner Chandler Guo opposed the PoS consensus method and launched the PoW-based Ethereum blockchain. Although creating the PoW Ethereum chain could be a win for miners over stakers, ETHW users have suffered accessibility issues.
The chain ID that ETHPoW used is 10001, but it was already used by Bitcoin Cash testnet. As a result, users of the MetaMask cryptocurrency wallet faced problems because the Chain ID, acting as an identifier, could not differentiate between two separate blockchains.
Chain IDs can be chosen at will since there is no central repository or registry, but pre-hard fork testing would have found the contradiction, while the team behind ETHW ignored the issue. Despite this, crypto exchanges such as Binance and Coinbase have shown support for ETHW. For example, Binance announced its ETHW mining pool, stating that it will be subject to the same review process as other cryptocurrencies.
Related: What is a cryptocurrency mining pool?
How does PoW Ethereum (ETHW) work?
The initial version of the Ethereum network (ie, Ethereum Classic) was based on the PoW consensus method. However, this version was hard forked to secure the network due to the DAO hack. EthereumFair and EthereumPOW are the other two hard forks of the original Ethereum blockchain that will continue to use proof-of-concept mining.
Proof-of-work cryptocurrencies like Bitcoin (BTC) are promoted as a censorship-resistant, trustless type of digital money created after one person or a small group of people solves a mathematical puzzle and proposes a new block. However, to prevent any small group of miners from enacting rules that would weaken the resistance to censorship, many non-cooperating miners must process transactions.
Similarly, to prevent anyone from abusing the system, ETHW miners will also continue to solve arbitrary mathematical challenges to validate transactions and mine new tokens. In return, they will be rewarded with ETHW, the native asset of the ETHPoW chain.
How to buy PoW Ethereum (ETHW)
Crypto trading platforms such as Crypto.com and exchanges such as Coinbase and Binance are examples of some places where ETHW supporters can buy proof-of-work Ethereum tokens.
For example, Binance formally launched Binance Pool’s fee-free Ethereum ETHW mining service that offers ETHW withdrawals for a limited time. However, please note that ETHW deposits are not possible. On Binance Convert, users can to sell ETHW vs. BUSD and USDT.
The basic steps required to buy ETHW on your chosen platform include:
- Create an account on your chosen platform/exchange and verify your identity.
- Once the identity verification process is successful, deposit funds.
- Users can go to the trading section and buy ETHW after their account has been funded.
But why do people use PoW Ethereum? Proof-of-stake critics prefer proof-of-work because they have already invested in expensive mining equipment, and the switch to a PoS network will leave them with no revenue.
How to store PoW Ethereum (ETHW)?
Hardware or software wallets can be used to store ETHW. Hardware wallets offer more security than software wallets because the funds are stored offline using wallets like Ledger Nano S. Crypto holders with software wallets maintain custody of their private keys as opposed to allowing them to be held by the exchange.
Related: Ethereum wallets: A beginner’s guide to storing ETH
Users who are mostly away from their computers can choose mobile wallets to store ETHW or any other cryptocurrency. However, the original owner may lose funds if the device is infected with malware. Alternatively, one can use paper wallets that store private and public keys and QR codes on paper. Again, if the document containing this information is lost or falls into the hands of unauthorized users, the owner’s ETHW cannot be recovered.
ETH vs ETHW
After the Merger, the Ethereum network was split into two versions: ETH, which uses the PoS consensus algorithm, and ETHW, which uses the older PoW algorithm. That said, ETHW miners get rewards in the form of Ethereum tokens by solving complicated mathematical puzzles, while validators will have to stake ETH for earning purposes.
ETHW attracts miners because without a proof-of-work consensus mechanism, they can go bankrupt as new tokens will be added to the blockchain through the staking process. On the other hand, the proof-of-stake blockchain is not a replacement for the original Ethereum blockchain but rather a fusion of the execution (mainnet) and consensus (Beacon chain) layers.
The differences between ETH and ETHW are stated in the table below:
Future of PoW Ethereum
The incentive structure of the PoW consensus scheme requires the network’s miners to perform many hashes to obtain the first usable block hash, resulting in unsustainable energy usage. Additionally, the consensus mechanism adjusts the block hash difficulty upwards as the network’s processing power grows, leading to a higher network-wide hash ratio.
Additionally, the energy used by failed miners is wasted, leading Ethereum to move to a proof-of-consensus mechanism. Although ETHW attracts miners because they have already invested in hardware mining equipment, the PoS consensus method is less energy-intensive and allows networks to scale cheaply.
Proof of stake is still in its infancy, potentially revolutionizing blockchain security and making mining obsolete. But it remains to be seen if PoS consensus algorithms will result in the complete cessation of PoW mining.
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