As per a research report published by Bank of America (BAC) last week, an Ethereum Foundation member recently stated that the switch from a proof of work (PoW) consensus mechanism to proof of stake (PoS) is expected in mid-September. The transition from a PoW consensus mechanism to PoS appears to be imminent.
The report further states that the Beacon Chain, a PoS consensus layer, will be combined with Ethereum’s current execution layer with Merge—the first of five planned updates for the blockchain.
The bank claimed that PoS lowers entry barriers for investors to create income as network validators, decreases Ethereum’s energy usage by over 99 per cent, and modifies the supply/demand dynamics of ETH.
Because of their PoS consensus mechanisms and increased scalability, newer blockchains like Binance Smart Chain (BSC), Tron, Avalanche, and Solana have surpassed Ethereum in terms of market share, according to Bank of America, and these features will “likely be key as the Web 3 ecosystem of decentralised applications emerges.”
The second of the planned updates, the “Surge,” similarly serves as a forerunner during the transition, the memo stated. By doing so, it will try to raise Ethereum’s throughput from roughly 15 transactions per second (TPS) to about 100,000 TPS while lowering transaction costs, it was stated. Ethereum is unlikely to continue to be the major blockchain operating system without the scalability upgrades, the bank claimed.