Mining Ethereum (The Move From PoS to PoW)


When will happen to Ethereum?

In August of last year (2017), Vitalik Buterin, creator of Ethereum, released the implementation guide for the first version of Casper.

As a hybrid proof-of-stake (PoS)/proof-of-work (PoW) algorithm, Casper v1 is going to decrease (and eventually end) the profitability for Ethereum miners.

The release date is estimated to be sometime in 2018 as part of the Constantinople hard fork and there’s a lot to learn before this happens:

  • What is Casper?
  • What is the “difficulty time bomb”?
  • How does this affect miners?

What is Casper?

Casper is a PoS algorithm that’s projected to be released on the Ethereum network sometime in 2018. Beginning as a hybrid with the current PoW algorithm, the first version of Casper will only use a PoS consensus to validate every 100th block, called “checkpoints”.

Once a checkpoint is validated, there’s no way to go back and use a chain without it. Even if 99% of miners support a chain that doesn’t include a checkpoint block, all clients in the network will still continue to use the one with the checkpoints. This removes a lot of the power that miners currently have.

The Ethereum community hypothesizes that the switch to PoS will help with the scaling issues that the network is currently facing. The algorithm should enable new blocks to be created more quickly while allowing the network to scale more efficiently through sharding. Sharding is a horizontal partitioning of a large database into smaller and more easily managed parts.

Beyond that, PoS algorithms also use less energy to run the network, reduce centralization, and make 51% attacks more difficult.

What is the “difficulty time bomb”?

With the upcoming hard fork, there could potentially be three forks of Ethereum:

  1. Ethereum PoS
  2. Ethereum PoW
  3. Ethereum Classic

And, if you’re a miner, you may be thinking, “No big deal, I’ll just continue to mine and give support to the Ethereum PoW fork.”

Not so fast.

The Ethereum developers have stated that they’ll be releasing what they call the “difficulty time bomb” on the PoW chain shortly after Casper is implemented. To put it simply, the difficulty time bomb increases the mining difficulty exponentially until the chain becomes impossible to mine – an event called the “Ethereum Ice Age”.

Implementation of this strategy should prevent the creation of a third fork as support for the original PoW fork will just shift to the new PoS fork. The time bomb was originally planned to go off at the end of 2017 but has been pushed back by a year and a half. Right now, there’s not an exact estimate of when it’ll be released.

How does this affect miners?

If you’re a miner, you may want to start looking for more profitable coins to mine. Even though a complete shift to a PoS algorithm is still a year or two away, it’s clear that the Ethereum community is almost unanimous in this decision.

Remember that this is a case situation and no guarantee can be made on the outcome of your investment based on this knowledge. Article interpretted by Cole Horton, and written by Steven Buchko of Coin Central. 


Real World Application (After the BIG Crash)

A Man Is Trying To Sell His Car.

Take any business class in college and you’ll notice one thing that stands out as a universal theme. Money, the glue that holds the market intact. With a business its main goal is to generate as much revenue as it can… but at the cost of providing some sort of real world benefit. Without a product or service at the end, what can a business really do you for or the real world? In order for these companies to survive they have to help YOU, the consumer in some sort of way. If a company has nothing behind it you have a Ponzi scheme (BitConnect) which is an evil form of business that we as a society aim to stay clear from. Think about it, you can fall in love with a concept all you want, but if it isn’t practical or has utility what are you really in love with? You’re probably in love with the possibility of it getting hyped up for NO reason and making you RICH. Don’t lie to yourself because we’ve all made that bet before on a coin or two or three. It’s okay to speculate, but when reality comes crashing down all you have left is well… nothing because the rug was pulled under you so fast that you had no idea what actually hit you.

The goal in this new market is to pick the few winners that we hope can survive the big crash and make it on to become big names someday in the near future. We’re not predicting the future instead we are looking at coins or tokens with the best possibility of finding real world utility. Once the market matures we can set our sights on finding the left over companies who can create the greatest return of value for its shareholders or coin-holders (this is the daily goal of investing in stock markets).

First, I will release the picks in the form of a list then describe them below in as basic of a concept as I can. Reason being is because you didn’t pay me to be your financial adviser and instead I’m leading you into the direction to make your own call and hopefully be comfortable with your own decision. NOTE: The list is in no particular order and is incompelete.

  1. Bitcoin
  2. Ethereum
  3. Ripple
  4. Factom
  5. Golem
  6. Siacoin
  7. Civic
  8. Neo
  9. Steem
  10. Decentraland
  11. Wax
  12. Syscoin
  13. OmiseGo
  14. Dash
  15. Storj
  16. Stellar


  1. Bitcoin (BTC) – This is the gold standard of all cryptocurrency. The first one to hit the streets and the biggest one we know of today. At this point in Bitcoin’s life it is mainly used as a great store of value. Supply and demand play a big role in its future value. At 21 million coins and a growing population of people with access to information it is not hard to see how 21 million coins (a very limited supply) can go quick. It seems that with the fees ever so growing and wait times getting longer that this coin can really only be used to store value long-term value.
  2. Ethereum (ETH) – I hate to have to go through the basic ones like this but the value is there. Ethereum is the king of contracts and tokens. Look at the list of tokens out there, it’s obvious that Ethereum holds the number one spot for the amount for tokens using their native blockchain. In the real world, this platform has the ability to change the way a long of companies operate. In and of itself, Ethereum will be mostly behind the scenes, but its use is evident.
  3. Ripple (XRP) – Say all you want about XRP. This coin, and the company are here to stay. First, we must realize the difference in the Ripple company. You have Ripple (the actual company), RippleNet (the juice behind the company and its native blockchain), and finally XRP (the native digital asset). We are focused currently on the digital asset in this article so let’s start by saying that it has potential. If you have someone institution that wants to send, let’s say $38,000,000,000 you’re going to need those coins to be worth more that $1 a piece to be able to even handle such a load.
  4. Factom (FCT) – The coin that is the Fort Knox of data storage. You want to make sure that you’re about to hire a clean person with no criminal record? Factom keeps track of EVERYTHING about anything so that nothing is secret about a person or organization. Yes, this can be scary, but people forget that the government doesn’t already do that. Actually, speaking of the government, back in 2016 Factom was awarded a contract by the Department of Homeland Security for $200,000 to develop a system of security of digital identity for Internet of Things (IoT) devices.
  5. Golem (GNT) – Need to borrow a super computer for some reason? Seek Golem. A supercomputer powered by multiple PCs to entire data centers. If one computer on the network fails, no worry for it is decentralized, and like most of the coins in the market, have no one weak point that can be penetrated and ruin the system. So you have full-time access to a supercomputer that is almost always guaranteed not to die out on you.
  6. Siacoin (SC) – The cloud storage of blockchain technology. Just as Google Drive holds any information you want on THEIR servers, Sia can hold anything you want on their native blockchain. How? through the combined usage of all the computers on the network. When you join the network you can sell excess storage on your computer to anybody else and get paid to do it. Your information is broke up into little pieces and encrypted then sent out in many pieces across the network to other computers.
  7. Civic (CVC) – Equifax needs to read this part of the article. Civic is designed to secure people’s personal information away from hackers. Knowing how blockchain technology works it’s easy to see how this company works. Instead of having one point of entry, hackers would need a very LARGE team to even think of penetrating the Civic platform (almost impossible). Many companies in the world that hold personal information can greatly benefit from this company.
  8. Neo (NEO) – the Ethereum of China as they say. This coin aims to compete with Ethereum in a lot of ways and maybe someday in the near future they may be competing head to head. Smart contracts, platforms and tokens are the basics you need to know about this coin. Just as Ethereum, you can build any kind of token you want and release to the public. We see this coin as a foreign competitor that can possibly thrive right next to the top coins in the market. A quick tip, you hold this coin in your NEO wallet, you get paid in GAS token which itself is a token that is slowly gaining value in the market.
  9. Steem (STEEM) – the platform that aims to be the leader in social media, blogging, and content creation alike. Similar to YouTube, Steem has DTube which aims to be a main competitor. Although they might need to really consider a name change, DTube is the decentralized YouTube that wants to take away bias in who gets monetized and who doesn’t. No more rules that hurt the content creators who are just trying to make a living and releasing good content. There’s a lot more, but that’s your job to look into.
  10. Decentraland (MANA) – Straight from the website on this token, “Decentraland is the first virtual platform owned by its users. Grab a VR headset or use your web browser and become completely immersed in a 3D, interactive world There are plenty of opportunities to explore or even create your own piece of the universe. Here, you can purchase land through the Ethereum blockchain, creating an immutable record of ownership. No one can limit what you build. With full control over your land, you can create unique experiences unlike anything in existence. Your imagination is the limit: go to a casino, watch live music, attend a workshop, shop with friends, start a business, test drive a car, visit an underwater resort, and much, much more—all within a 360-degree, virtual world”.
  11. Wax (WAX) – I’ve mentioned this coin many times on my blog (twice) and I feel like it has potential to actually rock the $50 billion market that it resides in. A token that is traded on the WAX platform that users receive or pay out whenever they want to exchange “digital clothing”. Just how we in the real world buy and sell clothes and receive USD, on the Worldwide Asset Exchange we can buy and sell virtual skins and receive the native token. A Mike Novogratz favorite and a personal favorite of mine as well. Not too much of a gamer, but when there’s an idea like this that is virtually NEW to the market, I don’t see this having a hard time penetrating the market once it gains the proper traction it needs.
  12. Syscoin (SYS) – straight from the website, ” FULLY DECENTRALIZED MARKETPLACE. We have developed a state-of-the-art marketplace where you can securely and reliably buy and sell any items you wish. Entire stores can be created directly through the marketplace where you can sell your own products or re-sell others’ products for commission. Like Ebay or Amazon without corporate gouging, political interference, downtime, maintenance or hefty fees. Truly 1:1 global commerce. No middle man”.
  13. OmiseGo (OMG) – “OmiseGO is a public Ethereum-based financial technology for use in mainstream digital wallets, that enables real-time, peer-to-peer value exchange and payment services agnostically across jurisdictions and organizational silos, and across both fiat money and decentralized currencies. Designed to enable financial inclusion and disrupt existing institutions, access will be made available to everyone via the OmiseGO network and digital wallet framework.”
  14. Dash (DASH) – Supplied by, “Dash is unlike other cryptocurrency projects like Ethereum or Stratis which are more of a development platform. Dash advocates itself as peer-to-peer decentralized electronic cash. It intends to be as liquid as real cash which we use in our respective countries like USD/GBP/EUR/INR or CNY. Dash is built upon Bitcoin’s core code with the addition of new features (such as privacy and quick transactions). Like BTC, Dash is open-source and has its own blockchain, wallet infrastructure, and community. But unlike BTC, its transaction fee is negligible. Moreover, it looks like from the attitude of the development community that Dash will only remain as digital money for the internet, which is a good thing”.
  15. Storj (STORJ) – This is similar to Siacoin, you can think that if this and Siacoin were to make it into the mature market someday into the future that it would be like Apple vs Android. Some people would trust Siacoin because it was bigger early on in the cryptocurrency market or Storj because it’s the new kid on the block. Nonetheless, this is blockchain technology meets encryption meets cloud storage. Your payment? Storj.
  16. Stellar (XLM) – a Ripple fork that aims to do what Ripple is doing, but more in the free side. What do I mean? Currently they are non-profit and want to be a leader in global payments. Can they do it? Maybe, if the team can gain even more traction and maybe one day go to for profit instead, they’ll be able to catch up in market cap and join Ripple in being leaders for global payments that are frictionless, and far times more of an improvement over the traditional payment systems like SWIFT.