SummaryThe Ethereum blockchain is on the verge of a major and risky upgrade which, if successful, would greatly reduce electricity use.This, in turn, would increase Ethereum’s acceptability to policymakers and financial institutions.Though, implementing such a fundamental upgrade while the network keeps running is ambitious.By Teunis Brosens, Suvi Platerink Kosonen, Maureen SchullerAn ambitious upgrade to the world’s second most important blockchainAfter a long period of anticipation, and if final tests go well, the world’s second blockchain Ethereum will probably transition from “proof of work” ((POW)) to “proof of stake” ((POS)) later this month. This means that transactions on the Ethereum blockchain will no longer be recorded by miners that spend a lot of computing power to prove they worked hard to verify transactions. After “the merge”, transactions will be processed by validators, that have staked Ether (in other words, put collateral in escrow) that can be forfeited if it turns out they were acting in bad faith.The discussion about the pros and cons of PoS vs. PoW is almost as old as Bitcoin, and we can’t represent all arguments here. What we’re interested in is that this transition to PoS may over time increase the acceptability of Ethereum, and all of the apps built on top of it, for policymakers and regulators. This, in turn, may provide a boost to traditional financial institutions' willingness to develop Ethereum-...
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