With Ethereum’s network 5th birthday just around the corner, let’s have a closer look at what did we learn from the Proof of Work consensus algorithm. Proof of Work, a consensus mechanism, has proved to be the backbone of some of the leading and widely-adopted blockchain networks. These include Ethereum, Litecoin, and, of course, Bitcoin. Many from the blockchain industry have wondered how come Proof of Work (PoW) remained so resilient over all these years. Some are even baffled by its resilience as it has withstood a long list of challenges like growth, performance, and security issues over the years.
Key Takeaways From 5 Years of PoW
The below takeaways are taken from Consensys’ report that reviews 5 years of proof of work for Ethereum.
51% Owned by two mining pools
51% of Ethereum network’s hash rate was owned by two mining pools and this has happened twice in all of Ethereum’s existence until now. There’s one really interesting occurrence that has been found with Ethereum mining. The miner count declined in the year after the DAO. This decline happened at the time when the number of payout addresses was rising. The price of Ethereum was soaring in the middle of 2017 but the number of mining counts was at an all-time low with just 61 active mining pools. Read More...