By Nathan Ferguson
The wave of cryptocurrencies is spreading everywhere. According to various international economists, cryptocurrencies are the currencies of the future. This is evident from the fact that Bitcoin crossed one trillion dollars in market capitalization. This value is for Bitcoin alone, there are thousands more cryptocurrencies other than Bitcoin.
The success of cryptocurrencies can be attributed to innovation. Innovation has been the single driving force behind the success of cryptocurrencies. International researchers are working day and night to find novel ways of improving the current crypto network. This is the reason that we witness net technologies and novel processes in the crypto community with each passing day.
The underlying technology used in cryptocurrencies is blockchain technology. It is a revolutionary technology that supports cryptocurrencies. The main advantage of cryptocurrencies is that these currencies are decentralized. This means that there is no third party involved while making transactions. This eliminates the use of banks in the financial system. Therefore, these currencies are gaining popularity among the masses.
There are only three ways to acquire cryptocurrencies. You can get cryptocurrencies through the process of mining. This process is also called proof of work. In this process, you will need to own mining equipment and then the system will verify and solve various mathematical problems and at the end of these problems, a reward is awarded. This is the simplest way to earn cryptocurrencies.
The second method to earn cryptocurrencies is by staking. This process is called proof of stake. In this process, the investor stakes an amount of any cryptocurrency with a staking pool. The staked currency helps to verify and validate the transactions and in return, the investor is rewarded with cryptocurrencies. This process is also widely used worldwide and it is getting more common with time.
Lastly, you can acquire cryptocurrencies by trading them. Any fiat currency can be used to buy cryptocurrencies. You can use US Dollars, Pounds, or any international currency to purchase cryptocurrencies. This can be done by peer-to-peer transaction or p2p. This method is also used worldwide to trade cryptocurrencies.
Many famous cryptocurrencies like Bitcoin, and Ethereum use the proof of work (PoW) concept. The BTC and ETH miners heavily rely on PoW to mine these currencies. This is because the prices of these currencies are relatively more stable than other currencies.
The process of proof of work is very easy. It doesn’t require technical knowledge or any sort of skill to mine the coin. The ether network is pretty easy to understand and the software used for mining is also very rudimentary and easy to use.
This is the reason that miners from all over the world have shifted their focus on mining from other currencies to ETH. However, a large influx of investors choked the Ethereum network and as a result, the mining of ETH became challenging.
On the other hand, the price of ETH kept on rising and even though the competition became tough, the profits remained steady. As a result, the network became flooded with miners.
To stop this from happening, the Ethereum blockchain was shifted from proof of work to proof of stake. This was a drastic step from the ether network and this step stopped all proof of work payments to the miners. Therefore, the focus of the ether network shifted from proof of work to proof of stake.
To solve this issue, and to save the investments of the miners, the developers at the ether network introduced an alternative method to save the investments of the miner. They introduced a new coin called PoW Ethereum or ETHW. The vision of the developers behind the ETHW is that they have created it as a forked version that could be used on the Ethereum blockchain.
This was the idea of Chinese developers and the coin was created by a Chinese miner. He created the coin by merging consensus and execution of layers on the underlying ether blockchain.
The creation of the coin is a revolutionary idea because, on the one hand, it revived the proof of work for the ether networks; on the other hand, ETHW saved the blockchain from forks. Mining is a complicated process.
A system has to validate and perform various calculations to earn the rewards. While performing calculations, more than one block may be mined at a time. This means that sometimes more than one block is discovered while mining and this block creates problems for the entire blockchain.
The creation of extra blocks leads to latency in data propagation and this in return, creates various branches of the blockchain. This process is called a fork. The fork is extremely dangerous for the blockchain because it creates various branches in the blockchain and reduces the speed of the entire network.
The idea of ETHW is revolutionary because, with this coin, the miners add blocks to the blockchain only if the first valid block is published and it is verified by the network. This process saves the blockchain from the creation of various branches and helps to maintain the legitimacy of the network.
The article will cover the details of the proof of work Ethereum fork, the difference between ETH and ETHW, and most importantly, the history of ETHW.
What is ETHW?
ETHW is the long-awaited version of ETH. It is the version of ETH that is compatible with mining. Miners all over the world earn ETHW by proof of work process. This coin provides the much-awaited upgrade to the already existing Ether coin.
This update nudges the gap that the miners have been facing since the ether network stopped the ether blockchain from adding the coins through proof of work. The ETHW presents the alternative in the form that one can use proof of work to mine ETW.
Before ETW, the ETH could only be mined as proof of stake. This step was taken by the ether network to increase the energy efficiency of the ether blockchain. This step stopped the miners from mining Ethereum. This puts their investment at a risk. Therefore, to solve this issue, the ether network introduced the ETHW, so that the miners could use this coin for mining.
ETHW also provides much-needed relief to the ether network because it stops the discovery of parallel blocks. ETHW only allows a single block to be mined at once. This stops the blockchain from getting choked. This is called a fork. Therefore, ETHW prevents the forking of the blockchain and increases the speed of the entire blockchain.
The next question that arises is who is behind this revolutionary idea. The answer is a Chinese miner named Chandler Guo. He had an idea to convert the PoS consensus method to a PoW-based Ethereum blockchain. This hailed a great victory of ETH miners over ETH stakers and the balance of the ether network once again shifted in favor of ETH miners.
In crypto mining, there is a term called chain ID. This is a value that is unique to each currency on the blockchain. The platforms like Binance use this ID to differentiate between the various cryptocurrencies. This ID is unique for each currency and helps to keep a record of the currency. The chain ID associated with ETHW is 10001.
This was the number that Mr. Chandler Guo used to define ETHW. His idea proved to be successful as most of the miners shifted to this chain ID. However, there was one issue with the ID. The same ID was already in use by a Bitcoin Cash testnet. As a result, users with crypto wallets on the MetaMask platforms faced several issues.
Since the chain ID was the same, therefore, the platform could not differentiate between the two currencies. Therefore, a lot of miners faced transaction problems.
Moreover, the developer of the ether network ignored this issue and as a result, the situation aggravated. The underlying reason for the occurrence of the problem is that the pre-hard fork wasn’t done by the developers. However, some crypto exchanges like Coinbase and Binance continued to offer ETHW mining on their platforms.
How does PoW Ethereum work?
The initial version of the Ether network was an Ethereum classic. Ethereum gained a lot of success within the crypto community. Various miners from all over the world pooled their resources into Ethereum classic. The demand for the currency increased and suddenly it became the second-largest currency after Bitcoin.
Initially, the Ethereum classic was based on proof of work. This meant that it could only be mined with mining equipment. Miners from all over the world invested heavily in mining equipment and gained massive profits. However, the mining of Ethereum became crowded and the ether blockchain became vulnerable to forks. These forks posed a grave danger to the network and to solve this issue ETHW was introduced.
The concept of proof of work involves solving mathematical problems and validating transactions. GPUs and ASICs are used for this purpose. The amount of ether earned depends upon the speed of solving the problem.
If a miner solves mathematical problems faster then he will earn more rewards than others. This way, a chain of miners is formed. This chain solves and validates the transactions and in return, a decentralized network is formed. This network eliminates the need for third-party assistance in financial transactions.
Similarly, the decentralized nature of the currency prevents anyone from abusing the system because miners from all over the world constantly validate the entire blockchain. All transactions are verified by the users many times over. This way no one can cheat the system and the system remains transparent.
How to buy PoW Ethereum
You can buy ETHW from any online trading platform. Various online trading platforms offer ETHW like Binance, Coinbase, and Crypto.com. The supporters of PoW Ethereum can purchase the ETHW from these platforms without any fear.
Binance has launched a fee-free Ethereum mining service. This service allows users to withdraw Ethereum without any fee. However, this offer is only for a limited time. Moreover, on Binance convert, you can sell ETHW against USDT and BUSD. This means that the users can only sell the ETHW, but they cannot buy or deposit the ETW.
The steps you need to take to buy ETHW on your selected platform include:
- First of all, you need to open an account on your selected platform.
- Then you will need to verify your account
- After your account has been verified, you need to deposit funds.
- Now you can trade ETHW
There is also a great debate between the two major types of investors. These include proof of stake investors versus proof of work miners. Both argue the advantages and disadvantages of their way of earning Ethereum. There are equal merits for both processes and you can select any method you want according to your needs.
How to store PoW Ethereum (ETHW)?
Ethereum is a popular cryptocurrency. Various online and offline platforms offer to store Ethereum. This is because Ethereum is the second largest currency after Bitcoin, therefore, Ethereum users need to store their assets. For this purpose, various platforms have developed online and offline wallets to store Ethereum.
Software and hardware wallets can be used to store Ethereum. These wallets can also be used to store ETHW. It is generally believed that hardware wallets offer more security than software wallets. This is because the hardware wallets offer offline storage of ETHW. Examples of these wallets include Ledger Nano S.
Software wallets allow users to retain their keys. This means that users of the software wallets can have custody of their private keys. This feature is missing in the hard wallets. In hard wallets, the platform or the exchange has custody of the key of the wallet.
Moreover, users who don’t use the desktop frequently, or don’t have access to a computer or a laptop, can use their mobile phone to store their ETHW. Various platforms offer mobile wallet facilities. The users can use this facility to store their ETHW.
However, there is a catch. If your device or mobile is infected with malware, then you can lose your entire portfolio of ETHW. In cryptocurrencies, the key to the wallet is the most important feature. If a user loses the password of his wallet account, then he loses the entire portfolio associated with that account. That is why some users prefer paper wallets. But if a user loses the paper, he loses the entire portfolio.
ETH vs. ETHW
There is a lot of difference between ETH and ETHW. Both coins belong to the Ether network. This means that both coins operate on the same blockchain. The underlying technology of both coins is the same. Moreover, the price of both coins is also the same. Both coins can be traded with each other with a ratio of 1:1. The developing team of both coins is the same. Both coins are popular among the masses.
However, there is a slight difference in both coins. First of all, ETH is based on PoS whereas ETHW is based on PoW. This means that ETH can be earned by staking it in a mining pool or a savings account. On the other hand, ETHW can only be earned by mining it. ETHW can be earned by solving various mathematical problems and validating various transactions. This method is called proof of stake and Ethereum miners use this process to mine ETHW.
ETHW requires huge infrastructure and initial investment. The energy cost associated with ETHW is also higher. But on the other hand, the profits with ETHW are guaranteed. The profit ratio of ETHW is higher than its counterpart. Moreover, ETH has a low centralized risk and ETHW has a high centralized risk. Therefore, you need to consider all these options and analyze them thoroughly to choose between the two coins.
Final Words: Future of ETHW
Initially, Ethereum was introduced as proof of work technology. Ethereum miners from all over the world used this method to earn ETH. The incredible success of the Ethereum coin made it the second-largest cryptocurrency worldwide.
As a result, miners from all over the world shifted their mining equipment towards mining Ethereum. This flooded the market and the blockchain overloaded. The blockchain became prone to various outside threats and forks. To solve this issue, ETW was introduced. ETHW is the counterpart of ETH. Both are equal in value.
ETHW has a bright future ahead. Although a lot of infrastructure is required in the PoW process of ETHW, it is a reliable way of making a profit. The counterpart of PoW, PoS offers very little infrastructure. It is also more energy efficient than PoW. However, the PoS process is relatively new and there is not much that we know about it.
Moreover, the profit margins in PoS are significantly lower than in PoW. This means that PoW still holds sway over the PoS. This will continue to happen even in the future. This is because the PoW provides the blockchain with much-needed safety and validation. Therefore, the ETHW has a bright future ahead.