- Ethereum co-founder Vitalik Buterin has sent 3,200 ETH for staking on Ethereum 2.0.
- The next iteration of the blockchain network is due to launch on Dec 1, but only if a minimum amount is deposited.
- Buterin also laid out a strong argument for proof of stake.
The deposit contract is like a bridge between Ethereum’s current proof-of-work (PoW) blockchain, and its much-anticipated proof-of-stake (PoS) vision, called Ethereum 2.0, which is expected to launch, in its first phase, on December 1.
A minimum deposit of 32 ETH (currently worth around $14,000) is needed to stake on the new blockchain, so Buterin’s deposit is ample. But it’s a significant amount, which needs to be locked up for a period of at least two years. That could be why, so far, only around 39,000 ETH has been deposited out of the total 524,000 (some $1.3 million) needed for the Eth 2.0 Genesis block to launch.
If the 524,000 ETH does not materialize before launch, the Genesis block will be delayed for another seven days, and so on until the funds are in place.
But those happy to commit can begin earning interest annually on their stake as soon as the platform’s beacon chain—a kind of backbone for the network— launches on or after December 1. This interest will start to replace mining rewards, and becomes the new way to pay for the security of the network.
Ethereum’s long journey to POS
Today, Buterin published a detailed explanation as to why the network needed to transition to PoS, and provided three core reasons.
First, he said PoS offers more security for the same cost. As opposed to forking out for mining equipment which could depreciate, Buterin said that, in PoS, “The only ‘cost’ being incurred to get this high level of security is just the inconvenience of not being able to move your coins around at will while you are staking.”
A further consideration is that “in proof of stake even a successful attack is much less harmful and much easier to recover from than an attack on proof of work!” said Buterin.
He explained that if a PoW-based system was attacked, there was little defence (aside from forking the blockchain), and it could render a chain permanently unusable, if miners dropped out. But PoS systems are equipped with safeguards, making them much more difficult and costly to attack.
Third, he said that PoS is more decentralized than using the ASIC miners (high powered computers designed to do specific tasks) needed for PoW. ASICs are expensive and require vast amounts of electricity, but with a PoS system, the minimum needed to invest was relatively low, said Buterin—meaning more people can get involved.
And he’s hoping that they’ll do so well before December 1.