Ethereum update defuses ‘difficulty bomb’ that could have stopped Ether crypto mining

December 8, 2021, 4:27 PM UTC

The Ethereum network is poised to get an upgrade Thursday that will stall a feature that could slow or halt mining of the cryptocurrency.

The Arrow Glacier update won’t impact investors, but it will delay the “difficulty bomb,” a planned exponential increase in the proof-of-work difficulty setting, long enough for developers to transition Ethereum mining from a proof-of-work model to a proof-of-stake (POS) model.

Ethereum miners currently are forced to solve complex math problems to reap rewards in the form of coins. This requires phenomenal amounts of computing power and has a large environmental footprint, something that has led to widespread criticism of the proof-of-work model.

The proof-of-stake model secures the blockchain through verifying transactions according to Ether holders’ stake in the token. It requires less computing power because it doesn’t reach consensus by having miners race to complete the same puzzle. The Ethereum Foundation wrote in its blog that if the switch to POS is successful, it could reduce Ethereum’s energy use by up to 99.95%.

Difficulty bombs are set to motivate the transition to POS. The Arrow Glacier update will push back the triggering of the difficulty bomb until next June, by which time developers hope to have completed the shift to POS.

The transition has already taken considerably longer than expected. The Ethereum Foundation initially expected it would take just one year to implement POS. It has taken more than six so far.

It’s Ethereum’s most significant update ever, but it’s not without critics. Moving to the POS model will lower miner revenue by between 20% and 35%, according to some estimates. And there are fears that the changes to Ethereum’s incentive model could push disgruntled miners to leave the network, try to sabotage it, or start a competing chain.

Ether, the native token of the Ethereum network, is up more than 500% in 2021. It was just above $4,400 in late morning trading, up 1% over the last 24 hours.

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