What is EthereumPoW?
EthereumPoW hard fork’s objectives
ETH and ETHW comparison
EthereumPoW supporting projects
ETHW coin price
After Ethereum successfully launched The Merge upgrade in September, the spotlight was placed on Ethereum (ETH) coin mining. With that, the blockchain’s new token, EthereumPoW (ETHW), has also been widely discussed. This article will go through ETHW’s definition, a comparison between ETH and ETHW, as well as ETHW-supporting projects.
What is EthereumPoW?
Short Answer: EthereumPoW (ETHW) is a new coin created on the Ethereum coin’s hard fork, which operates under the Proof of Work (PoW) system.
EthereumPoW or ETHW is an updated version of the Ethereum blockchain which was created after the hard fork. Ethereum’s transition towards the Proof of Work (PoW) consensus mechanism is the main project of the developer and miner team, led by Chandler Guo, a crypto savvy. The team strongly believes that the Ethereum network should be based on the PoW consensus mechanism.
Consensus mechanism: The method that the blockchain uses to complete its agreements, transactions, and security across its network.
Moreover, miners still want to gain profits from holding their coins even after the network switched over to mainly using the PoS consensus mechanism on 15 September 2022.
Hard fork: A blockchain network’s upgrade. It separates the crypto into two branches. Learn more about crypto hard forks here.
Therefore, Chandler Guo and the team started an ETHW campaign by issuing the idea on Twitter on 27 July 2022, which gained a lot of public attention, especially from the miners who opposed The Merge: including Even Tron, the founder, and big investors like Poloniex and Justin Sun. Not long after, Poloniex decided to stop supporting ETHW after another hard fork called Ethereumfair or ETHF was deployed.
However, ETHW is still supported by some trading exchanges such as FTX, ByBit, and BitMart.
EthereumPoW hard fork’s objectives
As mentioned above, the ETHW project or EthereumPoW was originally created by a group of miners who want to profit from PoW-based ETH mining. According to a report from Arcane research, ETH mining generated US$18 billion in 2021, which was higher than Bitcoin mining (US$ 17 billion)
Furthermore, ETH miners could still continue to gain more income in 2022. As shown in the chart below, Bitcoin’s mining revenue was always above Ethereum’s. Until 2021, when Ethereum’s mining revenue reached billions, which seems to have led to miners investing more in more effective mining tools to maximize their profits.
Nevertheless, the network switching to the PoS consensus mechanism has resulted in decreased Ethereum mining revenue, as PoS allows investors to stake their coins under the network’s algorithm without any mining tool required.
This has thus lead to the ETHW project.
ETH and ETHW comparison
Here are the main differences between ETHW and ETH
Different consensus mechanisms
After the network switched to the PoS consensus mechanism, ETH validators were randomly selected to validate the transactions. Validators need to stake at least 32 ETH to join the staking pool.
Apart from that, if a validator can detect a scam transaction, the transaction will be immediately adjusted or suspended, as known as Slashing. Besides, the PoS consensus mechanism can improve the network’s decentralization, as it doesn’t have centralized elements like PoW-based chains.
Transaction volume support or sharding system
Sharding is a process that improves the network’s processing speed. The Ethereum network leverages transaction processing by implementing 64 shards. Each shard works as a chain that links ETHW with the original Ethereum network in order to record transactions.
Apart from that, sharding can solve the scaling issue by supporting a larger transaction volume: while ETHW can process only 15 transactions a second, while ETH can process 100,000 transactions a second. Accordingly, ETH transaction process is more efficient.
Beacon Chain’s implementation
Beacon chain: Ethereum2.0’s new network. It is responsible for the system’s validation and is used to create new blocks.
The sharding network makes Ethereum the main blockchain of the ecosystem. The famous sharding network is called the Beacon chain, which was launched in 2020. It was designed to ensure that the Ethereum network under the PoS mechanism operates efficiently and sustainably before the official deployment.
The beacon chain processes transactions along with the Ethereum original chain, which has been under PoW since its first release. After The Merge upgrade, the beacon chain has become ETH’s main chain.
The network monitors transactions on the network by detecting the validators that violate the network’s rules, in order to fairly secure the Ethereum network.
EthereumPoW supporting projects
Not long after the launch of ETHW, several projects have shown their support toward the ecosystem, for instance, wallets, exchange platforms, and the Web3.0 platforms like UniSwap V3, MetaMask, and DefiEdge.
In addition, the mining pools started mining ETHW with F2pool while the other pools began to swap their resources with the coin, achieving 41.7% hash rate while Woolypooly gained 21.5% blocks followed by 2miners with 14.1% hash rate.
One of the ETHW-supporting trading exchanges, FTX had a US$47 million trading volume over the past 24 hours as of the beginning of October. As a result, Coinbase has confirmed that ETHW would be considered to be listed on the exchange.
ETHW coin price
As reported by the Decrypt website, the Binance platform announced its ETHW mining service for users on 30 September 2022. Further details stated that those who join the pool wouldn’t be charged until 29 October 2022. Moreover, ETHW had to go through a strict coin verification process to enhance Binance users’ security. However, Binance hasn’t confirmed that ETHW will be listed on its platform, despite the service.
The announcement from Binance pushed ETHW price up to US$12.21 which was a 12% increase in the past 24 hours according to CoinGecko.
As of 20 October, at the time of writing, ETHW is traded at US$6.25 based on CoinMarketCap.
To sum up, EthereumPoW or ETHW is the result of the Ethereum network’s hard fork. It aims to assist the miners under the PoW consensus to still gain their revenue by mining ETH. Although there’s been a lot of arguments over the topic, the ETHW movements are what we should keep an eye on.
Disclaimer: The information provided in this article is not intended to provide investment or financial advice. Investment decisions should be based on the individual’s financial needs, objectives, and risk profile. We encourage readers to understand the assets and risks before making any investment entirely.
