What is PoW Ethereum (ETHW)? How does It Work? A Complete Beginner’s Guide[2024]

After years of waiting, Ethereum has finally abandoned PoW in favor of PoS. However, some disagreed with the transition, especially miners who now have no place on Ethereum after the merge since it now deals with validators. So that is how EthereumPoW came to be.

EthereumPoW (ETHW) is a network launched by former Ethereum miners in response to the merge update. ETHW is listed on several crypto platforms.

Thus, expressing their disagreement, the miners split off and organized a new network that continues to use the proof-of-work algorithm.

Key Takeaways

• EthereumPoW or ETHW is a Proof-of-Work (PoW) fork of Ethereum and is a community-based project of sovereign developers and miners who didn’t want to switch to Ethereum’s Proof-of-Stake (PoS) after the Merge.
• While a blockchain fork entails copying all the existing features, wallet balances, assets, and smart contracts, existing stablecoins cannot be added to ETHW. This is because they are backed by real-world assets and it’s impossible to double the supply overnight while maintaining the peg.

What Is EthereumPoW?

EthereumPoW (ETHW) is a ‘hard fork’ of the Ethereum blockchain following the latest upgrade of the network. Supporters of the hard fork include miners unhappy with the transition to the new algorithm. As part of the update, Ethereum switched to a proof-of-stake algorithm, with the fork version still running on a proof-of-work algorithm.

ETHW is similar to the old Ethereum network in that it is a branched-out version of the blockchain. The old network’s tokens and smart contracts now run on the specified fork.

Where Did ETHW Come From?

The Ethereum PoW fork arose because a small but largely active group of participants in the crypto community felt that the consensus proof-of-work mechanism should be followed. Among these groups are many miners who intend to keep their profits after Ethereum switched to the consensus proof-of-work mechanism on September 15. In recent months, prominent miner Chandler Guo has supported ETHW, arguing that Ethereum will take away cryptocurrency miners and jobs. In addition, Justin Sun, the founder of Tron, has joined in supporting ETHW in the same way.

The embedded token for the EthereumPoW network is ETHW, which only some exchanges support so far. Several projects have started supporting the ecosystem in the short time since the launch of the EthereumPoW network. These include several decentralized wallets like Guarda and other Web3 platforms.

How Does EthereumPoW Work?

To validate transactions and create new blocks, as with other PoW cryptocurrencies such as Bitcoin, ETHW miners must use their computing power to solve a random mathematical problem, resulting in ETHW.

Unlike the more efficient proof-of-stake, proof-of-work is considered a more decentralized way to verify transactions because it requires more computers on the network to confirm and approve transactions.

ETHW miners will still solve arbitrary mathematical problems to validate transactions and mine new tokens to prevent system abuse. As a reward, they will receive ETHW, the main asset of the ETHPoW chain.

What Is the Future of Ethereum Proof-Of-Work Token?

The PoW consensus scheme has an incentive structure whereby miners have to make many hashes to determine the hash for the first matching block, resulting in higher power consumption. Meanwhile, the consensus mechanism adjusts the complexity of block hashing as the computational power of the network increases, resulting in a network-wide increase in hashing speed.

The energy consumed by losing miners is also wasted, forcing Ethereum to switch to the proof-of-stake consensus mechanism. ETHW is attractive to miners who have already invested in mining hardware. However, the PoS consensus method is less energy intensive and allows for inexpensive scaling of networks.

The proof-of-stake mechanism is still in its infancy. It could revolutionize blockchain security and make mining obsolete in the long run. But today, it is unknown whether PoS consensus algorithms will lead to the complete end of PoW mining.

The ETHW token

Ethereum Proof of Work (ETHW) revolves around the Ethereum token (ETH) as transaction fuel and rewards for miners. Users pay ETH for transactions and smart contracts, while miners are rewarded with newly minted ETH and transaction fees. The value of ETH is influenced by demand, supply, adoption, and market factors. ETH serves both as a means of payment and an investment in the network.

The Technology Behind ETHW

The technology behind Ethereum Proof of Work consists of a decentralized network of computers, known as nodes. These nodes collaborate to verify transactions and maintain a ledger, which is the blockchain. Each node has a copy of the blockchain and performs complex calculations to validate transactions and add new blocks to the blockchain. This process is called mining and ensures the security and integrity of the network.

Once a block is added to the blockchain, the transactions within it are considered confirmed, and the information cannot be altered. This provides a secure and reliable way to process transactions on Ethereum.

Transactions and smart contracts on ETHW are processed using the Solidity programming language and require ETH to pay transaction fees.

The technology behind Ethereum has had a significant impact on the world of blockchain and cryptocurrency. Ethereum offers a wide range of possibilities, including decentralized finance (DeFi), NFTs, and more.

ETHW Сompetitors

ETHW vs. ETC

Just like ETHW, Ethereum Classic was forked from Ethereum. Although ETC uses a PoW algorithm like ETHW, ETC still has an edge due to its significant hash rate growth and steady price growth. Even though ETHW has been in the spotlight for quite some time now, we cannot overlook the fact that ETC has been in the market longer.

Looking at the current situation and the difficulties with ETHW, it is hard to say whether it will do well in the market like ETC.

ETHW vs. BCH

Bitcoin Cash is another forked token. It was forked from Bitcoin, and just like ETC and ETHW, it uses the PoW mechanism. But, just like ETC, it has been in the market for a long time, and crypto users already know about the BCH, unlike ETHW with very little information about it.

Learn more: https://gemini.google.com/app

ETHW Vs. ETH

ETHW is the native token for the EthereumPoW network, while ETH is the native currency for Ethereum. Here is how these two tokens compare: 

Change in Consensus Mechanism

After the transition to the PoS mechanism, the Ethereum network randomly picks an ETH validator and bestows them the responsibility of determining the next block. To be an individual validator, you must stake a minimum of 32 ETH. If you have less than 32 ETH and want to participate in ETH staking, you can join a staking pool. To protect the network from scams and frauds, validators caught verifying fraudulent transactions are fined – this process is known as slashing. 

Besides being sustainable, PoS consensus helps Ethereum become more decentralized than EthereumPoW. Besides, validators don’t have to purchase expensive mining equipment anymore. Even if they don’t hold 32 ETH to join as an individual validator, ETH holders can stake their tokens through a mining pool to secure the network, and more participation leads to more decentralization. 

Sharding

Another significant upcoming update that differentiates ETH from EthereumPoW is sharding. Sharding is a programming process where data is distributed to multiple computers to boost processing speed. Ethereum will be leveraging sharding by introducing 64 shards. Each shard is like a new chain linked to the previous Ethereum network to integrate with the previously recorded transactions. Ethereum and EthereumPoW work similarly, only that ETH distributes the workload into several databases. 

Sharding will directly solve Ethereum’s scalability issues. Unlike EthereumPoW, which only processes 15 TPS, ETH will become more efficient, processing almost 100,000 TPS. You can think of EthereumPoW as a busy street with a single lane, and ETH has a busy road with multiple lanes. The expansion makes traffic flow seamlessly and increases the speed with which vehicles move. 

However, Sharding is only estimated to ship in 2023-2024.

Beacon Chain

We have discussed how Ethereum has introduced 64 shards and how validators are chosen to verify blocks. However, something should connect the shards and determine the validator. This takes us to the final significant difference between ETHW and ETH. The 64 shards are integrated into a single blockchain that controls them and facilitates transactions. As such, the blockchain acts as the brain of the whole ecosystem and is known as Beacon Chain. 

The Beacon Chain was launched in 2020 to ensure the PoS mechanism was functional and sustainable before implementing it officially. As such, it operated alongside the original PoW chain. But after The Merge, it started acting as the main chain for ETH.  

Another role of the Beacon Chain is randomly selecting validators and monitoring their activities. The chain is also responsible for penalizing validators who attempt to validate illegitimate transactions. The randomness in choosing the validators is necessary to ensure the network is not partial towards some participants. 

Benefits of EthereumPow

Ethereum Proof of Work (PoW) offers several unique advantages contributing to its popularity and usability:

• A secure, reliable, and proven foundation with the Ethereum system.
• Accessibility: Anyone can participate in EthereumPow.
• Applicability: EthereumPoW supports a wide range of DeFi, NFT, and gaming services.

Drawbacks of EthereumPow

Ethereum Proof of Work (PoW) also has several disadvantages that traders should consider:

• A Proof of Work mechanism requires substantial equipment and energy, making it less environmentally friendly.
• During congestion, the EthereumPow network can become congested, leading to higher transaction costs and longer wait times.
• Centralization: Many miners are grouped in large mining pools, resulting in significant network influence by a few major players.

Who is the founder of EthereumPow?

here is no specific founder of Ethereum Proof of Work because the Ethereum fork was proposed and approved by a large group of users.

The original Ethereum itself was founded by Vitalik Buterin, a prominent figure in the blockchain industry. The PoW algorithm has been a fundamental part of the Ethereum network and was developed by a team of developers, including Vitalik Buterin, Gavin Wood, and others.

Price forecasts

In 2026 experts expect a minimal price of €7.47 and a minimal price of €24.67 in 2031.

The EthereumPow ecosystem

The EthereumPow ecosystem revolves around enabling decentralized applications and transactions on the Ethereum blockchain. This ecosystem includes several key elements that work together to make everything function:

• Users: They use ETH (Ether) to buy or sell goods and services.
• Miners: These specialized computers process and validate transactions. They add these transactions to the blockchain by solving complex mathematical puzzles. Miners receive new Ether coins and a portion of transaction fees as a reward for their work.
• Nodes: Computers participating in the Ethereum network that store the complete blockchain. They distribute transactions and blocks across the network, ensuring everything stays synchronized.
• Smart Contracts: Self-executing code that automatically performs actions based on specific events. They manage digital assets and execute decentralized applications.
• Decentralized Applications (dApps): Applications on the Ethereum blockchain, ranging from financial services to gaming and art. dApps utilize smart contracts and can interact with each other and with users.
• Ether (ETH): The digital currency of Ethereum, used as a reward for miners, to pay transaction fees, and as a store of value.
• Ethereum Improvement Proposals (EIPs): Proposals for improvements to the Ethereum protocol. They can suggest changes in technology, rules, or features.
• Ethereum Foundation: An organization dedicated to the development and promotion of the Ethereum network. They fund development projects and work to expand the ecosystem.

Why Did the EthereumPoW Hard Fork Take Place? 

Before we jump into the reason why EthereumPoW hard fork took place, let’s learn the meaning of a hard fork. A hard fork is a blockchain software upgrade that demands all network validators comply with the latest version of the network’s software. While Ethereum has experienced multiple hard forks before, the most significant hard fork happened in 2016 when Ethereum split into Ethereum (ETH) and Ethereum Classic (ETC). 

EthereumPoW hard fork occurred because some miners didn’t want to give up on the lucrative PoW mechanism for the less-lucrative PoS. According to the latest report from Arcane Research, Ethereum mining earnings hit $18 billion in 2021, slightly above Bitcoin’s $17 billion returns. Even in the better part of 2022, Ethereum miners have been topping the earning charts. Below is a graph comparing the mining rewards of the two most significant digital currencies by market cap for the past two years.  

As shown, Bitcoin mining revenues were higher than Ethereum’s until 2021. With the revenues hitting billions, Ethereum miners invested heavily in high-end mining equipment to boost their earnings. However, these earnings have instantly become extinct as Ethereum has shifted from PoW to PoS. This is why some miners vowed to continue with a PoW mechanism on the Ethereum network. 

In a PoW network, miners are responsible for confirming transactions and competing with each other to solve mathematical puzzles. On the other hand, a PoS network eliminates miners from the equation. Instead, investors stake their tokens to secure the network and don’t need mining equipment. An algorithm randomly picks stakers to determine the next block, and those with larger stakes have higher chances of being chosen. The major benefit of a PoS network is that it’s energy-efficient compared to a PoW blockchain.

Will EthereumPoW Succeed? 

A blockchain fork entails copying all the existing features, wallet balances, assets, and smart contracts. This implies that all the assets running on Ethereum will now run on the EthereumPoW mainnet. However, this isn’t sensible without the backing of the community. When a network splits, the users determine the “real” chain by looking for value. For EthereumPoW to succeed, it requires widespread support from daily crypto users, developers, and businesses – not just miners. Without these three categories of people, ETHW will become useless, like a discounted photocopy of the Mona Lisa.

However, this is unlikely to occur, primarily because of Ethereum’s extensive ecosystem. Ethereum’s ecosystem comprises thousands of independent assets, DeFi marketplaces, NFTs, and stablecoins. 

Adding stablecoins to ETHW is more complicated, as stablecoins are backed by real-world assets, like dollars in a bank account. This means it’s almost impossible to fork such assets without depositing collateral in a financial institution unless you are the U.S. Federal Reserve. 

For instance, the biggest stablecoin by market cap, Tether (USDT), has considered the above issues. Its CTO Paulo Ardoino said the company would only be backing post-Merge Ethereum. USDT accounts for billions of dollars on Ethereum. EthereumPoW will face some challenges without the support of Tether. Ardoino stated that DeFi complications guided their decision. 

How to Buy and Store EthereumPoW?

Many cryptocurrency platforms support the purchase of Ethereum tokens with value confirmation. Though Guarda Wallet supports the token, you cannot buy the token on Guarda. You can only send, exchange, receive, and store ETHW. There are various ways to get it if you wish to hold it in your wallet.

The first method is to claim the token airdropped to users who held ETH at the time of the merge. The second way is to swap other tokens in your wallet available for exchange for ETHW.

You can store ETHW on Guarda Wallet. It is available on web and desktop versions.

Conclusion

Although the project has several challenges, its future remains uncertain. ETHW is a network similar to the old Ethereum, as it is a branched-out version of this blockchain. This means that tokens and smart contracts from the old network now run on that fork. Ethereum PoW fork is supported by a group of miners who have stated their intention to keep the PoW chain after the merger, a term commonly used for the network’s transition to PoS.

The network was launched shortly after the merger took place. Still, its start was quite complicated as the network faced several technical problems, including the problem of network identification.

Disclaimer ||

The Information provided on this website article does not constitute investment advice ,financial advice,trading advice,or any other sort of advice and you should not treat any of the website’s content as such.

Always do your own research! DYOR NFA

Coin Data Cap does not recommend that any cryptocurrency should be bought, sold or held by you, Do Conduct your own due diligence and consult your financial adviser before making any investment decisions!