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Over the years, Ethereum has emerged as one of the most powerful crypto platforms, with a strong focus on innovation, research and development. The numerous upgrades that the network has undergone since its inception allowed Ethereum to stay flexible, adapt to new challenges and maintain its relevancy in the fast-paced crypto industry by improving its scalability, safety and sustainability.
However, developments and advances should always be planned carefully and approached with caution in order to reduce risks and ensure positive outcomes. That makes one of the main points of interest for Ethereum developers. While users are primarily concerned about Ethereum’s price evolution, its potential as a short- and long-term investment or the best way to buy Ethereum, things look a bit differently on the other side of the fence where developers have their eyes set on completely different aspects.
Ethereum’s co-founder Vitalik Buterin seems preoccupied with one aspect in particular, as revealed in his latest blog post titled “Don’t overload Ethereum’s consensus”. In the post, Buterin expresses his concerns over extending Ethereum’s consensus layer beyond its current purposes, talking about the risks and implications this might have on the network while also offering a few potential solutions in this respect.
Ethereum consensus mechanism explained
For those who tuned in late to the crypto craze and are not familiar with Ethereum’s inner workings, we should start by explaining what a consensus mechanism is. In simple terms, a consensus mechanism refers to a range of protocols and practices employed by blockchain systems such as Ethereum to reach agreements that determine the state of the network and ensure its proper functioning.
There are different types of consensus mechanisms in blockchain, each of them with its unique characteristics, advantages and challenges. Ethereum currently relies on a proof-of-stale (PoS) consensus layer, but that wasn’t always the case. When it was launched, Ethereum was based on a proof-of-work (PoW) protocol, just like the one Bitcoin still uses. While PoW has proven effective in verifying and validating transactions, it requires considerable amounts of computing resources which translates into massive energy consumption. As a result, crypto networks that use PoW have been harshly criticized for their lack of sustainability.
Being aware of this issue, Ethereum developers decided to relinquish the energy-intensive PoW and replace it with the eco-friendlier PoS. That seemed to be the plan all along, but at the time the network was launched this was not yet feasible. In the end, the switch from PoW to PoS took place in September 2022, in an upgrade commonly referred to as the Merge.
Under the new PoS protocol, miners were replaced with validators, changing the way blocks are validated. In order to qualify as a validator, users have to stake a specific number of coins, usually 32 ETH. An algorithm randomly asks a validator to propose a block and then other random validators are tasked with reviewing, validating and adding new transaction blocks to the blockchain.
After successfully completing the process, validators are rewarded with new ETH. This arbitrary selection eliminates the computer-powered competition from the equation, thus substantially reducing the network energy consumption. After transitioning to the PoS consensus, Ethereum managed to cut its energy usage by up to 99%, becoming one of the most sustainable blockchains in existence.
What are the risks of extending Ethereum’s consensus mechanism?
At the moment, the PoS consensus is strictly used to verify and validate transactions, and Ethereum’s co-founder Vitalik Buterin thinks things should remain this way. According to Buterin who posted a lengthy blog on the topic, attempting to include other functions to Ethereum’s consensus would open the network to systemic risks.
Buterin went on to talk about the various proposals and suggestions that emerged over the years with regard to extending the use cases of the consensus mechanism. Ideas such as using the consensus protocol for price and data oracles, or re-staking initiatives were considered at some point. He noted that attempting to add new features and functionalities to the network’s core is to be expected since this is the area that attracts the most attention from stakeholders and the crypto community at large.
However, one should also consider the risks associated with these types of changes as any new addition could make the network more vulnerable and fragile. The Russian-Canadian computer programmer explained that in doing so, the likelihood of high systemic risks such as bugs or an intentional 51% attack would increase considerably. To exemplify, Buterin talked about the risk of creating ETH/USD price oracles, where validators could be offered money to vote in a certain way. Nevertheless, he did mention that oracles require improvement, but suggested addressing them individually given that each issue comes presents different challenges.
Overall, Buterin’s message was to maintain the network’s minimalism and refrain from extending the scope of the consensus mechanism with extra functionalities that can cause more harm than good. He also added that there one should look for alternative strategies to support developers in their endeavors of improving the system and reaching security goals.
In the fast-evolving crypto space, the Ethereum network has earned a name as a trailblazer due to its constant upgrades and forward-thinking nature. Ethereum has always stood out from other crypto projects through its ever-expanding use cases and its potential to drive innovation and disruption across a wide range of industries and sectors.
However, as Vitalik Buterin pointed out in his latest blog post, developments don’t come without risks. One shouldn’t innovate just for the sake of innovation. The wiser approach is to analyze both potential benefits and hazards and decide if it’s worth taking the leap or not. This stands true for Ethereum and all other blockchain platforms that are looking to improve their operations and distinguish themselves from their competitors.
Featured image via Pixabay.