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Proof of work and proof of stake are both ways of achieving trustless and distributed consensus on the blockchain. Many... More consensus model within the next year or so. Many are wondering, ‘How many ether does one need to participate in Blockchain is a digital ledger that’s used for storing data on several servers across the world in a decentralized, trustless... More staking?’ Here is what we know so far.(ETH) will be switching to a
Although it is hard to pin an exact date on the transition, Ethereum will soon be moving to a proof-of-stake (PoS) consensus model. The so-called ‘Casper Protocol‘ will transform Ethereum from a proof-of-work (PoW) model to one where holders can stake their ether to confirm transactions on the network. By staking ether, users will receive validator rewards and network fees.
The Ethereum team has said that the first step of the rollout will be a hybrid version, combining PoW with PoS. However, in due time Ethereum will make the full transition over to PoS.
Based on the available information, the staking minimum in the proposal is 32 ether. This is based on what Ethereum co-founder Vitalik Buterin himself said in June 2018.
According to Vitalik, the idea is to make staking ultra-accessible. The target will be computers and even phones, which can be used to stake and function as validators on the network.
Yes, 32 ETH is the staking minimum in the sharding proposal.
— Vitalik Non-giver of Ether (@VitalikButerin) June 2, 2018
At a minimum, validators will have to run a client program and likely be required to connect to a node.
Keep in mind, however, that once ether is staked, it will be frozen for a fixed term. This fixed term can be three, six, nine, or 12 months. Validator rewards are also scaled depending on how long the ether is staked.
Coinbase has also said staking will be available through their services once the Casper Protocol is fully rolled out. The fine details are, of course, have yet to be announced.
Validators who stake their ether will receive both validator rewards as well as a portion of network fees. Validator rewards are given out after a successful block creation, and network fees are simply a cut of the transaction fees paid by network users.
Based on rough estimates made from developer proposals, the yearly validator rewards will amount between four and five percent per year. This will fluctuate, however, depending on how active the Ethereum network is at a given time.
Validator rewards can be estimated by using the staking rewards calculator. Just keep in mind that the calculator is only an estimation based on speculation about what is known so far as nothing has been made official.
Do you think staking ether will be worth the rewards? Let us know your thoughts in the comments below!
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