What is the Ethereum Improvement Proposal (EPI)?
Developers of Ethereum have published Ethereum Improvement Proposal to create a hybrid system of consensus that seeks to push the network away from issues associated with crypto mining.
The proposal consists of specifications for implementing the Hybrid Casper the Friendly Finality Gadget (FFG) network update, which will combine Proof-of-Work (POW) with Proof-of-Stake (POS) consensus, with the goal of eventually transitioning to POS.
What is the parameter of Ethereum Improvement Proposal (EPI)?
As the EIP documentation states, one of the parameters of the upgrade reduces the block reward for miners to 0.6 ETH from the current 3 ETH.
The POW block reward is reduced to 0.6 ETH/block because the security of the chain is greatly shifted from POW difficulty to POS conclusiveness and because rewards are now issued to both validators and miners.
Why Ethereum developers move POW to POS?
In the “Motivation” section of the proposal, Ethereum developers made it clear that the ultimate goal of the upgrade is to move the network from a POW to a POS system.
POW is the original consensus algorithm in a Blockchain network, with its most famous application in Bitcoin (BTC) crypto-currency. With POW consensus, miners compete against each other to verify transactions on the Blockchain network, and get rewards in the crypto mining.
Proof of Stake (PoS) was first introduced by Sunny King and Scott Nadal in 2012, intending to solve the problem of Bitcoin mining’s high energy consumption and other issues, suggesting another mechanism for transactions verification that would choose the nodes according to the amount of coins held by a person on a digital wallet.