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I don't see how this reduces energy consumption. To buy into being a validator node you need Ethereum, to get Ethereum you need to do proof of work, if the numb
by XorNot 4y ago
I don't see how this reduces energy consumption. To buy into being a validator node you need Ethereum, to get Ethereum you need to do proof of work, if the number of people doing it falls then mining Eth will get easier, and the most cost-effective investment in Eth would be running a large number of validator nodes to collect the payment (you know, all sitting in the same DC). So of course expanding your mining operation still makes sense since it will fund the increase in your validator node operation.
Why would anything change when the economic incentives haven't? Mining isn't getting less lucrative or necessary.
- AlexCoventry 4y agoYou can buy ethereum on an exchange. Essentially they're changing the economic commitment required to participate in the consensus from demonstration of computational work to a monetary stake.
- XorNot 4y agoThe end state of that is that all Ethereum winds up being staked. There's no reason not to stake Ethereum if there's no Ethereum inflation, and so the only new source of Ethereum would be PoW-mining.
- lokar 4y agoWon't it end up being deflationary under pow?
- ETH_start 4y agoPoW-mining is being turned off. The source of new ETH will be ETH holders selling ETH to meet liquidity needs. People cannot save 100% of their income forever.
- Yizahi 4y agoMost of it probably. And the more tokens you have the easier is to put majority of them in the stake, also any fees are irrelevant on the large scale operations, unlike the small transfers. So The biggest holders of tokens become the biggest stakers, and thus become the biggest earners. Since the rate of token accumulation will only increase because the of compounding of the tokens in the stake (new profits will be staked too).