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Date:
30th Nov 2020
Author:
CryptoAltum Research Team

It is Easier to be Profitable in Eth2 than in Proof-of-Work Says Vitalik Buterin


Operating an Eth2 node is easier and more profitable according to Vitalik Buterin. While other influencing variables could impact profitability, comments from the tech leader explain why the launch conditions were timely met last week and how validators are already priming themselves for a new consensus algorithm that will eventually replace Proof-of-Work and block mining.


Details: 

Proof-of-Stake systems rely on validators. They operate nodes, committing resources, and helping the network decentralize. For their participation, they receive a share of rewards. However, this is subject to uptime and whether they adhere to ground rules. In Eth2, the minimum uptime is 60 percent and compliance means no slashing and other needless penalties. It is a deviation away from Ethereum block mining where gear determines winners and block reward recipients. According to Vitalik, these differences mean it is easier for validators to remain profitably in Eth2 even if they are slashed initially. By the third week, they would be profitable and in the money now that he announced a significant penalty slash in the early months of staking. 


Impact on the ETH Price: 

Bullish. The more there are incentives and word of confidence from influencers, the more validators will join in, better decentralizing the network. Overly, this makes Eth2 more robust, stronger, and attractive for investors and dApp developers whose contributions introduce demand for ETH prices.


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